Robert F. Smith’s Motivation for Earning an MBA as an Engineer

In your conversation with the students, you shared that you were an exceptional chemical engineer. But something along the way as part of your career motivated you to go back and get an MBA at Columbia and change, in many ways, your trajectory in life. Talk a little bit about the motivation to get the MBA, how it influenced your thinking, and where that then led you into Goldman Sachs, in particular, an equity space that you were not fully aware of, but began to assume a great level of interest and excitement. Yeah, it's a great question. I'm going to give you two nuggets around that that frame it, take a number of years and condense it into two kind of frames. You know, I was a chemical engineer. At that period of time in my life, I thought there was no more noble pursuit than to invent something that no one else on the planet in the history of mankind had ever invented. And that usually gets recognized in the form of patents in the United States, or at least technical. And that was exciting. That was the most important thing to me, solving these complex problems, utilizing my chemical engineering skills. Which, by the way, we're starting to be enabled through the use of computing technology. We are just now starting to introduce programmable logic controllers, for instance, into process industries and changing the control paradigms of plants and manufacturing. Massive productivity implications across a number of industries. But I also had a book club with a bunch of African-American men who were members of my fraternity. You can mention the fraternity. Yeah, of course, Alpha Alpha, everybody knows. I didn't think there was another one, but anyway. Anyway, I'm teasing. My dad was a Q, but every generation has to improve. But the important part of this was that we had a book club of African-American males. And we'd get together. It was in Buffalo, New York, so there's not a whole lot to do in Buffalo, New York on Friday nights. And we'd read books, and we'd talk about things and put programs on for the community. And then Black Enterprise came up with this magazine. And it had these African-Americans on Wall Street. And I was like, well, what is Wall Street? I had no idea, because not only were there no engineers in my community, there are no investment bankers in my community. I had no idea what it was, and people's stocks and bonds, and how does this work. And so one of the guys started to really bring some information in, and here's how this works. This guy's actually a stockbroker today, because from that time, had said, man, I'm going to go apply my trade. And he left and went down and became a stockbroker, literally. Got in the car, went down, and got a job, and was working on Wall Street for 30-something years. But in that process, decided it was a good time for me to retool, because I started to really understand, I'll call it the economic activity in the world. Here's what I mean by that. There's labor, and there's capital. And chemical engineers, we are high-paid laborers. I made more money than my dad made in the peak of his career. I made $33,500 graduating from college. I didn't think you could make any more money than that until I got a raise. I'm making $36,000. I was like, oh my god, this is just amazing. And then I found out these guys on Wall Street are making a million dollars. And I look at their pictures, they didn't look any smarter than me. Darn sure weren't any better looking, right? I said, well, a couple of them were. But what I realized was that there was a whole world that placed a different value on a different set of skills that I didn't have. Now, I had just implemented a solution at one of the plants, Goodyear Tire and Rubber, and it had increased the productivity of this one line by 26%. So that's a whole shift, a massive value. But I didn't get paid a million dollars. So while that was valuable to the corporation, it clearly did not inure to the benefit of the labor who did that work, right? And so I said, let me go retool. So I look at different business schools. Ended up, I got into JD MBA program at Columbia, decided to just do the MBA. And while I am there, I then go, I do very well, first year, top student. So I had to come back for the summer graduation in my first and second year to get this award, the summer graduation. And lo and behold, there is one of these guys on that magazine cover who was the keynote speaker at that graduation. OK, a guy by the name of John Utendahl is a good friend of mine. He's a brother of mine now. He's like 6' 11", and just tall and beautiful. And I'm like, man. He's like, at the end of the graduation, he says, man, you got an interesting background. Have you ever thought about a career in investment banking? I was like, well, there's a bunch of investment bankers in my business school class, and I don't like any of them. And he says, well, why not? I said, well, you know, they think they know everything. And you've got to understand, I'm an engineer. We do know everything. It bothers us. And I said, in all honesty, I still don't really understand what you all do. And John's like, why don't you come down to my office? We're in New York. It's at Columbia Business School. And we have lunch. And we sat down, and it ended up being a two-hour lunch. And in that time, I got to understand a bit more about him, his career, how he got there. And then at the end of that, he called seven people. One of them, a guy by the name of Stan O'Neill, who happened to be then the CFO of Merrill Lynch. Guy by the name of Ray McGuire, who was one of the leaders in mergers and acquisitions. Anyway, a whole list of these. And these were the people on that magazine. They were his friends, right? And so I started then understanding the power of networks in that context. As an engineer, you solve problems, and that's what you do. But then I started to see how this whole Wall Street thing worked. And from that, figured out that the only business that I really liked in investment banking was mergers and acquisitions. And it was because, if you think about it, it's a board-level type discussion. It's a CEO-level discussion. With the exception of warfare and divorce, it's how assets get transferred across this planet, in single transactions, in essence. And I thought that was fascinating. And I said, I need to now go become an expert in mergers and acquisitions. And I ended up with jobs from a bunch of different places, but figured out that Goldman Sachs was the best place to learn that trade, because it is an apprenticeship job. So it is one that you're only going to learn from other people. And when I looked at the different firms at the time, there'd be one M&A guy, and it was usually a white guy who was surrounded by eight or 10 other people, junior people. And you were not going to get, how were you going to break into that? Whereas Goldman, at the time, was the only one that actually had this whole teamwork process, where you would work for two, three, or five different partners on different deals. And so as a result of that, you could actually get trained. So I knew it was important to get trained and to work on as many deals as I could, as opposed to hope to get the favor, curry the favor of the one M&A guy in the center of this, whatever that little concentric circle was. And so that's why I ended up going to Goldman Sachs and focusing on mergers and acquisitions. Excellent.