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Roger Martin

Roger Martin

Roger Martin is Dean of the Rotman School of Management at the University of Toronto and author, most recently, of The Design of Business. His website is www.rogerlmartin.com

One Night Stands

Ahh the battle of the sexes: redux. There are, of course, inevitable dangers associated with generalizing about what women are good at versus men, as Larry Summers knows all too well. But you asked and I will respond.

I guess that I would start from a slightly different perspective and assert that the premise is not possible because Wall Street was (and probably will be for a long time) a place not attractive for women to seek top leadership positions - and that was a rare occurrence in any respect.

I say that because it is not an industry high on nurture. The question was never: Is this takeover actually good for our client to make? Or is this underwriting the best thing for the long run welfare of our client? Or, is this transaction good for the counter-party too?

Instead, the question was: How high is the fee? Men (again generalizing too much in order to respond) are much more comfortable with the transactional nature of such a business than are women. So in some sense the question is entirely theoretical, women couldn't have been in charge of the Wall Street that exists. It would have had to have been a different Wall Street.

That having been said, the features that would have made it an attractive place for women to reach for the top would have worked simultaneously against the drivers of the crisis. In particular, it would have been an industry more focused on long-term mutually beneficial relationships and concern for and understanding of the entity on the other side of the transaction. Absence of those two features, more so than greed or ridiculous compensation, drove the financial crisis.

The fact that Wall Street wasn't particularly interested in the welfare of counter-parties gave it license not to get to know them or understand what made them tick or even stay solvent. And when those counter-parties went bust or couldn't deliver on the hedge they promised, the guys were stunned and amazed - not dissimilar to the guy who get a call from the one-night-stand who announces: "I'm pregnant." Similarly, when they had the opportunity to put product out into the market that was really not safe for its purchasers - but earned fabulous fees - they didn't hesitate; they shoveled it out. But it came back to haunt them.

So net, women wouldn't have run Wall Street. However, if Wall Street would have been run in a fashion that highly values the type of relationships that women are more inclined to prefer and more willing to invest in their development, then we wouldn't have had the type of crisis we are experiencing.

That having been said, because not even women are perfect, a women-run Wall Street might have created a crisis of a completely different sort!

By Roger Martin

 |  March 10, 2009; 10:23 AM ET
Category:  Women in Leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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