Hi, I'm Lori Rosenkopf and I'm the Vice Dean and Director of the Wharton Undergraduate Division, as well as a professor in our management department at Wharton. Today, I have the privilege of speaking with Jackie Reses, who has spent almost 20 years on Wall Street and in private equity at very prestigious firms, and in the last several years has moved out to the West Coast to work with very prominent tech firms. Let's talk about talent management. How important is talent management in new ventures? >> Talent is critical. If you have the wrong talent, it's almost impossible to succeed. The right talent will enable your business to thrive because you'll have the right people in place to drive strategy, to drive execution. And really make all the difference in the world in your ability to think through innovative problems in a startup company. >> And are there typical mistakes that companies make or any advice you might give? >> Well, ironically the advice I would give a founder is related to talent actually. Because I think in some cases when you're starting a company, you hire for the time and place that you're at and they start off. And you have to think about the next six months, the next year, what your needs are going to be and make sure you're staffing with the right quality and execution skills for a longer term. Not just the immediate issue at hand. >> You've spent a lot of time developing talent over the years, but let me ask you about how you developed your own talent. Was there any particular person who you feel was your best mentor or advisor, and what made them so? >> I had two amazing mentors. First, my father. My parents owned retail stores in New Jersey and Pennsylvania. And I grew up behind the counter of a retail pharmacy and making deliveries with my family throughout my entire childhood. I learned so much about how you run a business, how you take care of customers. That was in grind and who I was as a child. It's hard to escape the entrepreneurial environment when you grow up with grandparents and parents and siblings who are all entrepreneurs. The second person I would attribute a lot of the learnings while I was in my 20s, is a woman from Goldman Sachs named Suzanne Nora Johnson. Suzanne was a consummate professional. Everything she did was to the utmost quality, and she really thought about what was going to be best for every client. And I really learned about professionalism and integrity from Suzanne. >> There are so many qualities of professionals that people can say. What about qualities of entrepreneurs, do you believe that there are certain qualities that entrepreneurs need to have? >> I do, entrepreneurs are special people, founders are special people. There is a tenacity and inability to execute on a vision that is so rare. And to be able to put forth an idea and turn it into a product of business, a huge enterprise, I think, is a very special skill that not everybody has. It incorporates risk tolerance, it incorporates creativity, it incorporates hiring and thinking about the evolution of an idea. That I think it's a really rare and special skill that should be celebrated. >> Let's talk about evolution of companies, there's one thing to found to company but in many cases there's something else entirely to scale a business. Can you give us any specific examples of things that you've done and trying to scale companies that you think would be useful for our audience? >> Yeah, I think there are points of time for companies, that are just different in the evolution from startup to a big enterprise. Different times require different people, different times require different operational functions, organizational structures. I think every company really needs to figure out where they're at and what's most appropriate at the time. The benefit of being a company and having living breathing people is that you can always make a change. So find the right organizational structure that make sense for the time and for the next year that's going to most effectively scale a company and if that's not right for the long term then change it. But you don't have to think about it as a fix structure which can't be change and can't be evolve as a company grows and evolves over time. >> Let's talk about networks and networking. There's so much focus on that in the popular press. How have your own personal and professional networks helped you to acquire resources, whether that's talent, funding, other sorts of endorsements, so the like. >> There are two incredible networks in my like which I will forever be grateful to, the first is Wharton and the second is Goldman Sachs. I mean, Wharton from a population is a really unique place, a unique set of individuals to interact with, and a unique set of professors, to be taught by, interact with and share ideas with. And I think if you really embrace those networks and think about how to get the most out of them for what you want to achieve, you really can use them to their fullest effect. To the most part, people want to help you and you have to figure out where, in a school, in a professional environment, you can find mentors, or an idea, or someone who might be able to help you, or ask questions to. And I think if you really embrace those opportunities and use them to the fullest, you really can maximize the opportunities that you have in front of you. >> Let's talk about the broader role of ventures, venture creation in society. Do you have ways in which you try to quantify the impact of your work on jobs created or value created and the like? How do you think about that as a professional? >> So it was very easy to do in the context of private equity. If I wanted to measure job creation or impact of our investments, it was very easy to add up a portfolio, number of employees, revenue growth, cash flow growth, and say that we as a firm have had an impact on society. I think there's a broader role that we have to play in tech though. Where as we create the products and we think about the impact we'll have on society, it's not necessarily quantifiable issue. >> Mm-hm. >> And so, as we create products, we just have to think about how they're going to be use through different networks or what the secondary effects might be that we can have an impact on. I think in some cases, whether it be email or broadcast networks or even social networks, I don't think anybody anticipated that groups of friends would evolve into social networks that are encouraging social change. And I think being a part of that is super interesting albeit less quantifiable. >> Mm-hm, well, let's push on that. Social networks give people the opportunity to access connections they wouldn't normally have. And some of our audience will not have the prominent school or organizational affiliations as of yet, but are creating their network piece by piece through social networks. Any advice you have for people on how to make those connections work for them? >> The way that I would make those connections work is by really thinking about what you're trying to achieve. Obviously if students are taking a course, they are already ten steps ahead of the next person who hasn't made that decision to improve their life educate themselves and learn something new. I think just by making that decision is incredibly important. So I would use that information, I would use the network in the courses chat rooms. In order to find like minded people who are also trying to advance their education, get a better job, find something better in the world that they're trying to achieve. And it just evolves a person's network. And who knows what the impact will be. I think a lot of times things happen serendipitously and you never know where you're going to pick up something new that has an impact on either the mundane or the very obtuse and creative. I think that's where taking classes online can be a really interesting way to evolve yourself as a person because it's so easy to do in any environment at any time. And it really takes away all the friction and excuses you might have had, where you can't show up in a physical environment and commit a few years of time. Now, you can do it in kernels. You can find that information in very discrete ways and use it to a very specific effect. >> Can established firms be entrepreneurial? >> Absolutely. Established firms can absolutely be entrepreneurial. I think every firm has an ability to innovate, no matter what the company does and I also think every function has the ability to innovate, even if it's not an innovative function. The example I would use is take human resources. Typically, that's been a GNA function which hasn't been at the forefront of technology. And I think what you're starting to see today is human resources departments using data about people, about employment trends, in order to improve the performance of a company. I think it's tangible and I think the effects are having an impact on employees' happiness, the ability to serve shareholders from a performance point of view. >> Mm-hm. >> And also, just broadly infusing technology in departments that typically haven't seen them. >> There's so much attention on high tech startups and their innovative ideas. Can big firms keep up with them by innovating internally or do they need relationships with these firms, either partnerships or ultimately, acquisitions? What's the right balance? >> Right, I think innovation is embedded in a companies culture. If you have an innovative culture you can innovate. You always have to be willing to disrupt yourself and as long as you're willing to take that philosophy. And take a philosophy of change, think any company regardless of size, can innovate. Having said that, if you are in a company where you feel like you're falling behind, you're putting yourself in a position where you're less innovative then you'd like to be. I think the best thing to do is actually create small teams of people who are literally set up to disrupt the very company that they work at. Create discrete groups that can be set aside with the sole mission of coming up with an innovative business and potentially executing on that business that actually disrupts the company itself. I think that can create an environment where risk is appreciated, change is appreciated, and help imbue a entrepreneurial environment in a company that might be less willing to accept it more broadly. >> You mention that it's useful in established companies that are trying to be more innovative to sometimes create separate teams where people are given the sole mission of coming up with disruptive ideas and hopefully executing on them. Can companies that have reached that point find people like that internally, or do they need to go outside and bring new people in to break the common practices? >> If a company is accessing their ability to innovate, I think a lot of their ability to execute will be driven by the leadership of that company and how committed they truly are to taking risks and driving change. There are always people at different levels who can innovate, you just have to find them. And a CEOs job is to go through the organization, find the entrepreneurial talent and make sure that's embedded in the right roles in order to try to drive change in a business. I think there'll always be entrepreneurial people, you can't assume they're necessarily at the most senior ranks of the company, but that shouldn't matter. You want to take the right people with the right ideas and set them up in an environment where you can create a culture of risk and change in order to try to imbue that culture into a company. >> That sounds a lot like your own personal management philosophy. Are there any other words you would use to characterize yourself as a manager? As a leader? As an entrepreneur? >> I describe myself as anti-hierarchical and also transparent, and what I mean by anti-hierarchical is that I'm completely willing to accept any idea that is useful, regardless of where it comes from, at what level, what role. And I'd rather take the good idea, think about it, push on it and then execute on it, then worry about whether it has to bubble up through a traditional hierarchical structure. I think that's a lot more functional in order to generate change and try to drive new ideas forward in a company. I guess the second way I'd describe myself is transparent. I like a team to be open and honest with each other so that any idea and debate is debated openly in a room and not in the hallways outside of the room. I think if you create an environment of honesty, trust, transparency, it enables you to have good trusting relationships and really debate very difficult issues and come out of the room with a plan, even that not everyone agrees on, but a plan that the team has decided they're going to put forward and they're going to go execute on. And you've heard the debate. You've heard the ideas. And you make sure that even with that debate you've decided you have the best facts at hand to move forward with. >> You spent the early part of your career on the East Coast and more recently moved out to the West Coast. When you describe your management philosophy as being anti-hierarchical and transparent, does that work equally well on either coast, or do you find differences between the two coasts that have influenced what you need to do? >> So there are cultural differences between a lot of the tech companies in California and other industries. I think that's what makes tech unique and has a willingness to take risks. Having said that, one of the interesting elements of working in private equity is this notion of transparency and partnership. And so, I actually would credit working in private equity in a small partnership, albeit in a very large, successful firm, as being the place where I learned some of those philosophies about working with partners and sharing ideas and debate. And so, whether it be at Goldman Sachs or the private equity firm that I was a part of, I think those are the philosophies that really enable people to take risks, even in a very traditional environment like Wall Street and finance.