Notes From: Satya Nadella. “Hit Refresh.” (2/9)

October 15, 2017 

“This is not the book to describe the ins and outs of cricket, but it is a book that cannot avoid the metaphor of cricket and business.

Like most South Asians, I somehow fell in love with this most English of games on the dusty matting wickets of the Deccan Plateau in southern India.”

October 15, 2017 

“When I was ten I returned to Hyderabad, and for the next six years I truly and surely fell in love with cricket as a player for Hyderabad Public School (HPS)”

October 15, 2017 

“Cricket for me is like a wondrous Russian novel with plots and subplots played out over the course of multiple acts. In the end, one brilliant knock, or three deftly bowled balls, can change the complexion of a game.

There are three stories from my all-too-brief cricketing past that speak very directly to business and leadership principles I use even today as a CEO.”

October 15, 2017 

“The first principle is to compete vigorously and with passion in the face of uncertainty and intimidation.”

October 15, 2017 

“It showed me that you must always have respect for your competitor, but don’t be in awe. Go and compete.”

October 15, 2017 

“a second principle is simply the importance of putting your team first, ahead of your personal statistics and recognition”

October 15, 2017 

“There are of course many lessons and principles one can take from cricket, but for me a third is the central importance of leadership”

October 15, 2017 

“Our team captain in retrospect showed me what real leadership looks like. When my over had ended (that is, when I had thrown six balls), he replaced me with himself even though he was a better batsman than bowler. He quickly took the wicket—the batsman was out. Customarily taking a wicket that efficiently would argue for him remaining in as a bowler. But instead, he immediately handed the ball back to me and I took seven wickets of my own. Why did he do it? I surmised he wanted me to get my confidence back.”

October 15, 2017 

“I think that is perhaps the number one thing that leaders have to do: to bolster the confidence of the people you’re leading. ”

October 15, 2017 

“The arrival of our son, Zain, in August 1996 had been a watershed moment in Anu’s and my life together. His suffering from asphyxia in utero, had changed our lives in ways we had not anticipated. ”

October 15, 2017 

“My son’s condition requires that I draw daily upon the very same passion for ideas and empathy that I learned from my parents. And I do this both at home and at work. Whether I am meeting with people in Latin America, the Middle East, or one of the inner cities of America, I am always searching to understand people’s thoughts, feelings, and ideas.”

October 15, 2017 

“There’s a great scene in Sylvester Stallone’s Creed, the latest of his Rocky movie series. The champ jots down on a piece of paper a workout regimen for his protégé, who quickly snaps a photo of it on his smartphone. As the kid jogs away, Rocky yells, “Don’t you want the paper?”

October 15, 2017 

“I got it right here, it’s already up in the cloud,” the kid replies.

The aging Rocky looks skyward. “What cloud? What cloud?” Rocky may not know about the cloud, but millions of others rely on it.”

October 15, 2017 

“And while Microsoft was struggling with low market share in search, Steve had invested in it because it would require the company to compete in a sector beyond Windows and Office and build great technology—which he saw as the future of our industry. There was tremendous pressure for Microsoft to answer Amazon’s growing cloud business. This was the business he was inviting me to join.

“You should think about it, though,” Steve added. “This might be your last job at Microsoft, because if you fail there is no parachute. You may just crash with it.” I wondered at the time whether he meant it as a grim bit of humor or as a perfectly straightforward warning. I’m still not quite sure which it was.”

October 15, 2017 

“So one night, after a long day at work, I decided to drive over to Building 88, which housed the Internet search engineering team. I wanted to walk the hallways and see who these people were. How else could I empathize with the team I was being asked to lead? It was about 9 p.m., but the parking lot was packed. I’d expected to see a few stragglers finishing up their day but, no, the whole team was there working at their desks and eating take-out food. I didn’t really talk to anyone. But what I observed caused me to wonder: What gets people to work like this? Something important must be happening in Building 88.

Seeing the team that night, their commitment and dedication, clinched it for me. I told Steve, “Okay, I’m in.” What color was my parachute? I didn’t have one.”

October 30, 2017 

“we had to become great at consumer product design. We knew we needed great technology, but we also understood we needed a great experience, one you want to engage with time and again. ”

October 30, 2017 

“User scorecards determine which is the most effective. Sometimes, seemingly tiny differences can mean a lot. Something as simple as the color or size of a type font may profoundly impact the willingness of consumers to engage, triggering behavioral variations that may be worth tens of millions in revenue. Now Microsoft had to master this new approach to product design.”

October 30, 2017 

“Shortly after I took over, the company issued this statement: “Nadella and his team are tasked with leading Microsoft’s enterprise transformation into the cloud and providing the technology roadmap and vision for the future of business computing.” Steve had said the transformation would not happen overnight, but we were running out of time”

October 30, 2017 

“I also recognized this was a team that cared deeply about enterprises, those customers with exacting and sophisticated computing needs.”

October 30, 2017 

“Leadership means making choices and then rallying the team around those choices. One thing I had learned from my dad’s experience as a senior Indian government official was that few tasks are more difficult than building a lasting institution. The choice of leading through consensus versus fiat is a false one. Any institution-building comes from having a clear vision and culture that works to motivate progress both top-down and bottom-up.”

October 30, 2017 

“Microsoft had long held that the open-source software from Linux was the enemy. We couldn’t afford to cling to that attitude any longer. We had to meet the customers where they were and, more importantly, we needed to ensure that we viewed our opportunity not through a rearview mirror, but with a more future-oriented perspective. We changed the name of the product from Windows Azure to Microsoft Azure to make it clear that our cloud was not just about Windows.”

October 30, 2017 

“The cloud business taught me a series of lessons I would carry with me for years to come. Perhaps the most important is this: A leader must see the external opportunities and the internal capability and culture—and all of the connections among them—and respond to them before they become obvious parts of the conventional wisdom. It’s an art form, not a science. And a leader will not always get it right. But the batting average for how well a leader does this is going to define his or her longevity in business. It’s an insight that would serve me well when an even bigger set of challenges was presented to me as CEO.”

Notes From: Satya Nadella. “Hit Refresh.” iBooks. 

Check out this book on the iBooks Store: https://itunes.apple.com/dk/book/hit-refresh/id1128878569?mt=11

Notes From: Satya Nadella. “Hit Refresh.” (1/9)

October 10, 2017 

“...after years of outdistancing all of our competitors, something was changing—and not for the better. Innovation was being replaced by bureaucracy. Teamwork was being replaced by internal politics. We were falling behind.”

October 10, 2017 

“when I was named Microsoft’s third CEO in February 2014, I told employees that renewing our company’s culture would be my highest priority. I told them I was committed to ruthlessly removing barriers to innovation so we could get back to what we all joined the company to do—to make a difference in the world.”

October 10, 2017 

“Each week my senior leadership team (SLT) meets to review, brainstorm, and wrestle with big opportunities and difficult decisions. The SLT is made up of some very talented people—engineers, researchers, managers, and marketers. It’s a diverse group of men and women from a variety of backgrounds who have come to Microsoft because they love technology and they believe their work can make a difference”

October 10, 2017 

“I had been a member of the SLT myself when Steve Ballmer was CEO, and, while I admired every member of our team, I felt that we needed to deepen our understanding of one another—to delve into what really makes each of us tick—and to connect our personal philosophies to our jobs as leaders of the company. I knew that if we dropped those proverbial guns and channeled that collective IQ and energy into a refreshed mission, we could get back to the dream that first inspired Bill and Paul—democratizing leading-edge computer technology.”

October 10, 2017 

“Early one Friday morning the SLT assembled. Only this time it was not in our staid, executive boardroom. Instead we gathered in a more relaxed space on the far-side of campus, one frequented by software and game developers. It was open, airy, and unpretentious. Gone were the usual tables and chairs. There was no space to set up computers to monitor never-ending emails and newsfeeds. Our phones were put away—jammed into pants pockets, bags, and backpacks. Instead we sat on comfortable couches in a large circle. There was no place to hide. I opened the meeting by asking everyone to suspend judgment and try to stay in the moment. I was hopeful, but I was also somewhat anxious.”

October 10, 2017 

“Fear: of being ridiculed; of failing; of not looking like the smartest person in the room. And arrogance: I am too important for these games. “What a stupid question,” we had grown used to hearing.

But Dr. Gervais was encouraging. People began to breathe more easily and to laugh a little. Outside, the grayness of the morning brightened beneath the summer sun and one by one we all spoke.”

October 10, 2017 

“As I listened, I realized that in all of my years at Microsoft this was the first time I’d heard my colleagues talk about themselves, not exclusively about business matters. Looking around the room, I even saw a few teary eyes.”

October 10, 2017 

“I told them that we spend far too much time at work for it not to have deep meaning. If we can connect what we stand for as individuals with what this company is capable of, there is very little we can’t accomplish.”

October 14, 2017 

“My personal philosophy and my passion, developed over time and through exposure to many different experiences, is to connect new ideas with a growing sense of empathy for other people. Ideas excite me. Empathy grounds and centers me.”

October 14, 2017 

“Imagine you see a baby laying in the street, and the baby is crying. What do you do?” he asked.

“You call 911,” I replied without much forethought.

Richard walked me out of his office, put his arm around me, and said, “You need some empathy, man. If a baby is laying on a street crying, pick up the baby.”

October 14, 2017 

“ Zain was born at 11:29 p.m. on August 13, 1996, all of three pounds. He did not cry.

Zain was transported from the hospital in Bellevue across Lake Washington to Seattle Children’s Hospita”

October 14, 2017 

“Over the course of the next couple of years we learned more about the damage caused by asphyxia in utero, and how Zain would require a wheelchair and be reliant on us because of severe cerebral palsy. I was devastated. But mostly I was sad for how things turned out for me and Anu.”

October 14, 2017 

“Don’t get me wrong. I am anything but perfect and for sure not on the verge of achieving enlightenment or nirvana. It’s just that life’s experience has helped me build a growing sense of empathy for an ever-widening circle of people. I have empathy for people with disabilities. I have empathy for people trying to make a living from the inner cities and the Rust Belt to the developing countries of Asia, Africa, and Latin America. I have empathy for small business owners working to succeed. I have empathy for any person targeted with violence and hate because of the color of his or her skin, what they believe, or who they love.”

October 14, 2017 

“At the end of the day, we all came to the same stark realization: No one leader, no one group, and no one CEO would be the hero of Microsoft’s renewal. If there was to be a renewal, it would take all of us and all parts of each of us. Cultural transformation would be slow and trying before it would be rewarding.”

October 14, 2017 

“This is a book about transformation—one that is taking place today inside me and inside of our company, driven by a sense of empathy and a desire to empower others. But most important, it’s about the change coming in every life as we witness the most transformative wave of technology yet—one that will include artificial intelligence, mixed reality, and quantum computing. It’s about how people, organizations, and societies can and must transform—hit refresh—in their persistent quest for new energy, new ideas, relevance, and renewal. At the core, it’s about us humans and the unique quality we call empathy, which will become ever more valuable in a world where the torrent of technology will disrupt the status quo like never before.”

October 14, 2017 

“I have come to understand that my primary job is to curate our culture so that one hundred thousand inspired minds—Microsoft’s employees—can better shape our future. Books are so often written by leaders looking back on their tenures, not while they’re in the fog of war. What if we could share the journey together, the meditations of a sitting CEO in the midst of a massive transformation? ”

October 14, 2017 

“After twenty-two years as an engineer and a leader at Microsoft, I had been more philosophical than anxious about the search process for a new CEO. Even with speculation swirling about who would succeed Steve, quite frankly, my wife, Anu, and I largely ignored the rumors.”

October 14, 2017 

“If only it were as easy as punching that little refresh button on your browser. Sure, in this age of continuous updates and always-on technologies, hitting refresh may sound quaint, but still when it’s done right, when people and cultures re-create and refresh, a renaissance can be the result. Sports franchises do it. Apple did it. Detroit is doing it. One day ascending companies like Facebook will stop growing, and they will have to do it too.”

October 14, 2017 

“When I was about six, my five-month-old sister died. It had a huge impact on me and our family. Mom had to give up working after that. I think my sister’s death was the last straw.”

October 14, 2017 

“Among the children of IAS fathers, it was a rat race. For some of the IAS dads, simply passing the grueling entrance test meant they were set for life. It was the last test they would ever have to take. But my father believed passing the IAS exam was merely the entry point to being able to take even more important exams. He was a quintessential lifelong learner. But unlike most of my peers at that time, whose high-achieving parents applied tremendous pressure to achieve, I didn’t face any of that. My mom was just the opposite of a tiger mom. She never pressured me to do anything other than just be happy.”

October 14, 2017 

“As a kid, I couldn’t have cared less about pretty much anything, except for the sport of cricket. One time, my father hung a poster of ...

“Karl Marx in my bedroom; in response, my mother hung one of Lakshmi, the Indian goddess of plentitude and contentment. Their contrasting messages were clear: My father wanted intellectual ambition for me, while my mother wanted me to be happy versus being captive to any dogma. My reaction? The only poster I really wanted was one of my cricketing hero, the Hyderabadi great, M. L. Jaisimha, famous for his boyish good looks and graceful style, on and off the field.”

October 14, 2017 

“I flunked the Indian Institutes of Technology (IIT) entrance exam, the holy grail of all things academic for middle-class kids growing up in India at that time. My father, who never met an entrance test he did not pass, was more amused than annoyed. But, luckily, I had two other options to pursue engineering. I had gotten into mechanical engineering at Birla Institute of Technology in Mesra and electrical engineering (EE) at Manipal Institute of Technology. I chose Manipal based on a hunch that pursuing EE was going to get me closer to computers and software.”

October 14, 2017 

“Unlike the stereotype, I was actually not academically that great. I didn’t go to the elite Indian Institutes of Technology (IITs) that have become synonymous with building Silicon Valley. Only in America would someone like me get the chance to prove himself rather than be typecast based on the school I attended. I suppose that was true for earlier waves of immigration as well and will be just as true for new generations of immigrants.”

October 14, 2017 

“During the first semester at Wisconsin, I took image processing, a computer architecture class, and LISP, one of the oldest computer programming languages. The first set of assignments were just huge programming projects. I’d written a little bit of code but I was not a proficient coder by any stretch. ”

October 14, 2017 

“My focus was a computer science puzzle known as graph coloring. No, I wasn’t coloring graphs with crayons. Graph coloring is part of computational complexity theory in which you must assign labels, traditionally called colors, to elements of a graph within certain constraints. Think of it this way: Imagine coloring the U.S. map so that no state sharing a common border receives the same color. ”

October 14, 2017 

“Theoretical computer science really grabbed me because it showed the limits to what today’s computers can do. It led me to become fascinated by mathematicians and computer scientists John Von Neumann and Alan Turing, and by quantum computing, which I will write about later as we look ahead to artificial intelligence and machine learning. ”

October 14, 2017 

“In fact, I left Milwaukee in 1990 for my first job in Silicon Valley at Sun Microsystems. Sun was the king of workstations, a market Microsoft had in its crosshairs. Sun had an amazing collection of talent, including its founders Scott McNealy and Bill Joy, as well as James Gosling, the inventor of Java, and Eric Schmidt, our VP for software development who went on to run Novell and then Google.”

October 14, 2017 

“I had been recruited to join Microsoft as a twenty-five-year-old evangelist for Windows NT, a 32-bit operating system that was designed to extend the company’s popular consumer program into much more powerful business systems.”

October 14, 2017 

“The guys who had recruited me to Microsoft, Richard Tait and Jeff Teper, said they needed someone who understood UNIX and 32-bit operating systems. I was a little unsure. What I really wanted to do was go to business school. I knew that management would complement my engineering training, and I had been thinking about a switch to investment banking. I had gotten into the full-time program at University of Chicago, but Teper said, “You should just join us straightaway.” I decided to do both. I was able to switch my admission to the part-time program at Chicago, but then never told anyone that I was flying to Chicago for weekends. I finished my MBA in two years and was glad I did.”

October 14, 2017 

“I completed the MBA. It was an exciting time to be at Microsoft. Not long after joining I met Steve Ballmer for the first time. He stopped by my office to give me one of his very expressive high fives for leaving Sun and joining Microsoft. It was the first of what would be many interesting and enjoyable conversations with Steve over the years. There was a true sense of mission and energy at the company then. The sky was the limit.”

Notes From: Satya Nadella. “Hit Refresh.” iBooks. 

Check out this book on the iBooks Store: https://itunes.apple.com/dk/book/hit-refresh/id1128878569?mt=11

Podcast notes: How I built this - Stonyfield Yogurt: Gary Hirshberg

On the founders background: 

• Gary's mom said that it was insane, starting a business
• Soney field has more ups and downs than just about any other. It's an unlikely tale than ever; two guys milking their own cows
• Gary is the co-founder. He didn't really set out to build a company, but knew what it was to build one. His dad knew how to build a company in New Hampshire. In those days, their manufacturing was based there 
• Gary's childhood was volatile. The Family's business went bankrupt, the parents got divorced, and his childhood role model died. Lifestyle changed completely after the family lost everything
• His mom supported five kids herself; she became a buyer for a local family chain. Eventually, she became the senior buyer for Sheraton and Walt Disney
• Gary wanted to run away from all things business as all family was just screaming at each other as they were all involved. Business was something where people yelled and hung up on each other. After college, Gary went and worked at an organic farm and did environmental sciences at college 
• The other co-founder, Samuel was mostly teaching organic farming, and running the farm as a non-profit
• Reagan came into office at that time, and cut off the lifeline for sustainable research 
• Samuel had one cow, and he was experimenting with yogurt. He made everything that fermented, milk, kimchi etc. 
• Samuel was from Brooklyn, and knew how to make Jewish yoghurt and learned everything from the Jewish community 
• They started selling yoghurt to make up for lost grant money. He got some catholic nuns to give him 35k USD (sisters of mercy) as they were selling a monastery. They gave Samuel the money to build this company
• Gary helped run the farming school while Sam ran the yogurt venture

How did the yogurt start: 

• All started with one cow. The money from the nuns was used to buy six more cow and to finance a small factory, a closet / barn with a wood fired boiler
• Started producing on April 9,1983 and took the yogurt to the local market
• Sam didn't know about the price, so he started selling at 1.39/six packs
• They couldn't afford a refrigerator, so drove really fast to the stores. The product was selling through, but Sam was out of cash. Working capital was missing. They were 75k in the red, so Sam called his mother. Gary went to many former founders and get some money
• They first 10 years was about proving that organic food is possible. After that, it was about making money, and doing organic at the same time

On transition: 

• What % of the world education revenue is coming from yogurt? 75%. That made them a business not a non-profit. They bought the firm as IRS said it was not legal to run it as a non-profit. They valued the business at 1 million dollars. Sales were 250k that year. They sold some stock to the original lenders

On continuing troubles: 

• "1 kept hourly cashflows" - Gary. Whole foods didn't exist back then. Selling in 1984 was tough. All natural foods coops were not fully on board. 
• Gary's frisbee team, that's what got it rolling for everyone. Was it stressful ? Yes 24x7
• "If  you build it, they will come"
• They needed money for a lot of things going forward. Needed to switch over from wood oven etc. to get the real things. Cows were now 19 in count. They realized that they had to sell the cows one day when the power went out. They tried to sell the cows no farmer wanted to feed cows organic feed. They were betraying their values but there were no options
• They had their mothers and mother-in-laws money. VC's know that family and friends money, gotta give it back at the end of the day
• Never had cash in the bank for payroll. Gary's wife said - "mom don't do this". She saw that the whole thing was a nightmare. Meg loved Gary and the yogurt there was no where else to go. She had signed on to this crazy thing.And it got a lost worse

On even more troubles: 

• 1.5 years later, they expanded the plant, buying milk from farms. They had 1.3 million USD/year run rate by then. They had maxed out of the farm. They were looking at another factory. They got a new factory without due diligence. 
• In 1987 - a fateful weekend  - on a Thursday night, a banker called and said - "Gary you wanna buy the dairy?".The SBA announced that the manufacturer was bankrupt 
• The thing went into receivership. 100k was required to get inventory out of there. Shareholders paid up, but no yogurt was being made then without a factory. Volume had gone up; the old factory was restarted. Shareholders lent more money, and everything restarted. 247x production was needed to keep this going. 
• Markets were too difficult to get more funding from capital markets. Fruit suppliers were still shipping fruit at the end. If you don't ask you don't get. Desperation was breeding the business

On finally turning a profit: 

• Ultimately they found a dairy in Vermont to answer to problems. It was a much larger, 70 million dollar company by then 
• 1 million dollars of mother in laws money was in it. Meg said "you promise me, all this is done?"
• Lenders decided to switch things over then. They tried to throw the founders out and threatened to call the debt. With no choices left, Sam and Gary almost signed the deal. Sam had given up; Gary' heart was broken
• Then, they start designing a yogurt plant and didn't sign the deal. 597 k USD was required to start a new loan; 80% was available from the bank of new England. Gary told the bank on having the equity piece. Shareholders were called for the 125k equity piece; It worked. They paid off the debt - 2.5 million USD. 10% each of the company was held by Sam and Gary. 
• Revenues were 3.4 million / year by then, 6.5 million the year after, 10.1 million after that. They made 125k profit in 1992, first year of making profit. 
• 44 million in sales in 95. Now they were going back to roots by buying organic milk again. 
• 99- 100 million sales today

Why sell? 

• Sold to Danone eventually. Some people came in during 984, they needed some ROI and wanted to cash out. Gary felt a moral obligation to pay them back. Sam wanted to retire. Gary asked to keep control
• Head of M&A  at Danone laughed at him; eventually it worked

On Luck vs. skill: 

• Luck counts a lot. Lucky to have met his wife, mother in law, lenders
• Skill helps too - Sam made it possible

Podcast notes: The Spider Network, about the LIBOR scandal and Tom Hayes

On the title:

• The longest subtitle in the business book list
• A product of some rare moments of vivid dreams between the editor and David Enrich
• Cover is like a children's book cover, actually portrays the story
• It's a complex story - but a challenge to get through

The story in a nutshell: 

• It's a story about a scandal, and also a story of the people behind it
• People know about scandals in general but not too much about any specific one in detail
• People just know the common theme, so the author tries to bring the details rather than repeat what's seen in the newspapers
• It's also about Tom Hayes, and his accomplices 
• There's a lot more subtleties and nuances than previously thought 
• People who get caught in scandals are more of a product of a system that is designed for bad behavior. Some small bad apples are punished, but most get away
• There's a very small number of people who were convicted, many still remain employed after the scandal
• LIBOR is the worlds most important #, because it determines the interest rate on so many things that impact our daily lives (in the US or otherwise)
• The scandal erupted because LIBOR is a # pulled out of thin air, and banks determine it together; It's just an estimate
• Bankers recognized that they could nudge it up and down by some collaboration 
• One thing that comes across clearly is that everyone passes the blame down to one person from top to down

On sympathy for the characters:

• The investigation was not a black and white issue
• Bad bankers manipulating the LIBOR and harming normal people; most of the media views it this way
• Hayes came from middle class beginnings, his mom was working for Gordon Brown
• Hayes was relate-able for the author as he was a striver and eager to find a job and put his skills to use
• People behave badly because they are incentivized by institutions
• A closed system existed - it was clear that these bankers were out to out-earn each other and everyone else in society
• Banks were designed to lubricate the economy in the past. Now banks, especially pre crisis, were casinos, and were malicious
• Dumb money clients, that's basic what bankers called ordinary investors. Brokers would use these clients as baits as they were easy to rip off. Victims is the money of all the individual investors. It was also a violation of what is a banks purpose

On business books: 

• Michal Lewis, When genius failed, Barbarias at the gate
• Is this book going to change anything? Will it prevent anything? As a journalist - the author is cynical
• The author wants to help normal human beings to get into this, and get a basic understanding of whats going on. The finance industry is designing itself to not to be understood. 
• People who design this stuff are smart but human
• Impact and progress is incremental - but that's OK
• Prosecuters were basically focussed on Tom Hayes. Yes, Tom was guilty, but was justice served? No
• Hayes was not the only one; the bosses were doing exactly doing what he does. He's serving 11 years, alone, so that's unfair
• What does Tom think about your book? he hasn't read it. His wife recommended that he not read it as Tom is in bad mental health

What other books does the author admire: 

• Huge fan of this genre
• David read all of Toms favorite
• Lewis entire library; Blindside is favorite
• Den of Theives - Milken is also a favorite
• In the course of reporting on this, he was given a hard drive, the prosecutors hard drive
• It was not easily structured, but it was not grouped at all. David ran through it all - not efficiently

Podcast link: https://www.ft.com/content/1b7f43cb-0062-429d-b3f9-9cb9cdf579a3

Podcast notes: Ranji Nagaswami on MIB with Barry Ritholtz

On what brought her to UBS: 

• After business school, started as a quant. Ran the entire department globally running running FI eventually at UBS.Started at UBS and eventually held senior positions at Bridgewater as well. 
• Lived through the SNL crisis, asked to help with a high-yield portfolio, learned extensively from the chaos during that time frame. Essentially lived a career to jumping into things, being a problem solver throughout, eventually asked to run the division.

On markets 98-99: 

• "Buffet has lost it"- that was a saying then. Said she was a value investor herself in FI world. Gary Brinson, legendary value investor was critical in shaping her theories. Shortly after she joined, the firm was sold to Allianz capital. Then she moved to equities from FI, an unorthodox move according to her. 
• Barry mentions - best equity researchers all started as FI researchers. Ranji says its true because they understand cap structure, term structure, risk at a very granular level.
• 2000-04 - all of HY opportunities became value opportunities. Eventually Ranji rose to become CIO at Bernstein. Joined the firm at a troubled time. A fundamental reset was needed to firms retail investors
• Bernstein embraced the work of Kahnemen in terms of value investing. Recency bias, confirmation bias etc. shaped the retail offers to many retail investors
• She thought about, what are resources of risk/return needed to be though, and therefore brought down funds from 55 to 15
• Asset allocation strategies - were to single best way to manage biases

On the current Hirtle Callaghan position: 

• Now at Herdle Callahan, a firm that was the pioneer in the outsourced CIO business
• Think about an endowment, foundation, family - a 200 million firm that can not have the scale that is needed to attract human capital and everything else. Not just the operational backbone, but ability to access world class managers at low fees
• They are the mayo clinic. Someone comes in with an issue, and they need their problems solved

How do you fit in vs. other firms?

• 30 yrs ago, when the firm was formed, the outsourced CIO was not known. The Endowment model was not known. Single solution was not known. The industry didn't know any of that. Herdle Callahan firm is the largest standalone and privately owned firm with ~20 billion in assets today
• Most firms have conflict of interest as they have their own products (passive, active, liquid etc.)
• Factor investing was the firms way always, well before it was popularized
• Buying assets, any class, at the cheapest prices and reasonable valuations over long-time horizons is the firms strategy

On women in finance: 

• The data suggests that not much has changed. Ranji sees it as a personal mission. Balanced work force not just gender balanced workforce is her mission. Best possible pool of talent is important
• Process design is critical here. Inputs that drive recruiting, those need to be taken into account
• What's holding Wall street back? Unconscious bias. Leadership has not made it a priority 
• Barry mentions - women perform better as portfolio managers, and the make more unbiased decisions
• Ranji says - it's about culture of the firm

On asset management: 

• Pooling of assets was novel in the last 40 years, and it has been a tremendous innovation
• Savings have been more productive than before

Markets today: 

• We have come a long way from 2009, when everything was cheap. Interest rates have caused some of this. All risky assets are fully valued, and indeed over valued. Bond markets, the risk-free parts are fully valued. Credit is also looking fully valued as well. It's historical, relative to opportunities
• When you look at macro - earnings a strong, growth is fine, inflation is subdued, so we are prolonging this scenario
• Outside the US - earnings revisions are double digit
• Within equities - Europe is looking good. There is still room for improvement
• In the past 10 years of performance, Europe has done nothing
• Today, 10 years later, we have the excess of that. Risk free treasuries, corp orates, everything looks expensive to an extent

REITS, MLPs etc. vs. risk free: 

• Now, a negative view on energy. 4-6% weight in energy
• REITS - fully valued for a while now

Active vs. passive debate: 

• Journalistic excess for the most part. The firm is agnostic to this. There's time and place for both
• Today - Ranji is getting interested in active managers. In a market like today, active is looking better

On Aspen institute: 

• Aspen fellow now. Institute was created to ask leaders in business - what's their responsibility to society
• Using readings that are time tested - stoics, Aristotle, how do we trade off choices in society
• As we confronted with retail investors - all of the principles, to be a steward of client capital going forward

Experience at Bridgewater: 

• Fascinating institution in how they think about markets and risk. Broadened and deepened understanding there
• The culture piece, transparency, etc. in its benign form continues. 'How to be better at getting better' is the motto
• Bridgewater is a singular culture - the principles that have endured there - transparency and excellence

Herdle Callahan: Multiple asset classes - what's the process like for alternative investment selection: 

• First inform the client - if the market turns, the illiquid portfolio will double, this is explained to all clients
• No FoF. Within these asset classes - only investing in them - if it's cheap to public market beta
• Understanding correlation to rest of portfolio is important as well
• 11K HFs out there - most are correlated to equities. Merg-arb - is structural beta, don't wanna pay too much for that
• The portfolio construction for us - deeply focused on strategies of underlying managers. Deep research process on manager selection. Illiquidity premium must exist vs. the market

Whats the most interesting thing that people don't know about you? 

• "Conceptual creative side married to a hyper rational side has made me a leader thinker and a doer"
• Mentors were a very important factor. Burton Markhael was a mentor
• Never giving up on the value philosophy was important
• David Swinson helped shape philosophy of governance. People underestimate role on governance

Books: 

• Most important books in finance were on human behavior.
• http://ritholtz.com/2017/09/ranji-nagaswami-outsourced-chief-investment-officer/#more-190030

Impact investing - how significant is it? 

• Pension fund purchasing power is driving change in investing -  use capital for more productive uses in society. 
• "I'm a fundamental free market capitalist' ...but it has gone too far. Lack of responsibility - charging reasonable fees etc. is important. Changes are positive, but highlight the importance of  finance in society
• Increasing interest in ESG investing. More interest rather than actual commitment of capital
• It's not about dogma, it's about not being secondary to return generation

Outside office: 

• Mostly with Aspen leaders
• Meditation - talks about it at work

Advice to young people: 

• Be curious, be prepared, and build lasting relationships
• Only way to succeed in the market is playing the long-game. All you know, is how much you don't know