David McCormick
CEO of Bridgewater Associates
“You have to be decisive, see what works, learn, and get it right. The thing that we used to say in the military, which is, a good plan executed aggressively and violently is better than the perfect plan executed later. So, in other words, grabbing and taking and then learning as you go.”
Summary
Alan and his good friend David McCormick talk about the traits of a good leader and the tough decisions that leaders must make, especially in today’s uncertain times.
Mentions & Resources in this Episode
Roger Hillsman was a West Point graduate, World War Two veteran, and Assistant Secretary of State to John F. Kennedy
Jim Roddy was the County Executive of Allegheny County, Pittsburgh
General Strock was a general in the Gulf War
Hank Paulson was the Secretary of the Treasury from 2006-2009
Principles is Ray Dalio’s book
Guest Bio
David McCormick is the CEO of Bridgewater Associates. Prior to Bridgewater, he was the US Treasury Under Secretary for International Affairs in the George W. Bush Administration during the global financial crisis, and also had senior roles on the National Security Council and in the Department of Commerce.
Previously, David served as CEO and then President of two publicly-traded software companies, and before that was a consultant at McKinsey & Company. He is a graduate of the United States Military Academy, a veteran of the First Gulf War, and has a Ph.D. from Princeton’s School of Public and International Affairs.
Follow David on LinkedIn.
Clips from this Episode
Episode Transcription
Alan Fleischmann
You're listening to Leadership Matters on Sirius XM Radio. I'm your host, Alan Fleischmann. And I'm here with David McCormick, the CEO of Bridgewater, the largest hedge fund in the world. And you'll hear in a little bit why I've asked Dave to join us. He's an old friend, and he really is a leader who crisscrosses across the private, public, and civil society in everything that he does. David McCormick's rich and very career has spanned the military, government, academia, and technology. He graduated from West Point and served in the Army's legendary 82nd airborne unit. He was part of the first wave of American troops and into Iraq during the first Gulf War, where he led soldiers in clearing minefields and destroying Iraqi munitions. They later went on to earn a Ph.D. from Princeton University and ran two publicly traded software companies. He then held senior positions on the National Security Council at the Department of Commerce before joining the Treasury Department, as the Undersecretary for International Affairs in the George W. Bush administration. David has been with Bridgewater for the past decade. But what perhaps is most impressive about him is his life, his family’s lives. He's proud of his Pennsylvania roots. He collectively with his wife, Dina Powell, McCormick, has six daughters. And for those who've never heard of Dina, she is amazing in her own right. She is at Goldman Sachs as a top executive, which is a formidable force, as well, in the political, civil society, and private sector worlds. Dave, I'm really excited to have you here. Welcome to Leadership Matters. And we've got a lot to talk about. We've got one hour to cover a lot, I would say I get to have great guests on the show. I don't know if I've ever had anybody. I'll choose that things. One, I've never had anybody who has actually been a leader like you have in the private, public, and civil side of life and managed to hit the pinnacle of all of them. And I probably have never had anybody who's done all that, who is probably more reluctant to talk about himself than you. So I'm going to have a hard time probably getting you to know that we're going to focus on David McCormick a little bit. The way I'm going to trick you on the show, is to get you to talk about other people probably a little bit as well. But the reality is, you really are a great example of a leader. You're young, so the best years are yet to come. But I thought it'd be really important for people to hear a little bit about your story. So I'm grateful that you joined us today.
David McCormick
Oh, thanks Alan, for having me. And thanks for that intro. I feel like I should probably just call it a day at this point. I spy all downhill from here, but I'm really glad to have a chance to sit down with you.
Alan Fleischmann
Let's start a little bit about your background. And I know what's important to you, because I've heard you talk about it, is to talk to your parents a little bit. And a little bit of your roots in Pennsylvania because I believe you and your brother Doug, both of you have been very successful that you both think it all started a little bit with your mom and dad. So tell us a little bit about your Pennsylvania roots. And we'll build on from there.
David McCormick
Yeah, well, thanks. My mom and dad are both Pennsylvanians. Grew up in western Pennsylvania in little small towns called Punxsutawney and Plumville and eventually, both pursued a path of becoming teachers. And so they both came up through public service. My mom was an English teacher, and then an administrator. My dad was a teacher and then a principal and then ultimately became a university president of a little state college in northeastern Pennsylvania called Bloomsburg. And so I had the most wonderful childhood of growing up on a college campus in the president's house, which was at Bloomsburg State College at the time. And at Bloomsbury State College, I don't know the statistics, but probably something like 80% of the kids were first-generation college-goers and the children of immigrants. And so I had the chance to have the college in my backyard and be part of that wonderful small town in that wonderful university community.
Alan Fleischmann
What were your ages actually, when you were on the university campus?
David McCormick
I grew up there. My dad took the job when I was in second grade, I remember moving to Bloomsburg. And I graduated high school there and went from there on to West Point. And Bloomsburg is a classic small town and the university is the biggest employer, and it's in the coal region of Pennsylvania, and it's sort of a somewhat depressed area from an economic standpoint, although when fracking came into fashion that was in my area, so that became a big boon to the economy after I left. And it was both a challenge and But a wonderful opportunity to be the President's kid. Because when I got in trouble, which I did get in trouble periodically, the campus police would find me doing something. And at one unfortunate occasion that the town police had to bring me home. And so everybody knew who I was. And so all eyes were on me. But the other thing that was wonderful about it was I got to see my dad and mom really be leaders in that community. And so we would go down to the commons, it was called, where the kids ate dinner, and twice a week, for years, we would walk through the campus, from our house to the student dining hall, and we would get in line with the kids and we’d go through the cafeteria line. And then we pick a table and we go sit down with kids. And my mom and dad would ask questions to get to know the kids. And Doug and I would try to find the soda dispensers and the soft ice cream dispensers. And we saw that up close and personal. And we also had the amazing thing where every kid, there was about 1000 freshmen every year, they would want to host every one of them in the residence. So we would do dinners, buffet dinners, about 10 a year where all the freshmen would come through the President's home. So there was always something happening. And it was wonderful and vibrant and rural and in the middle of nowhere, in some ways. And then because it was a university, you'd have some amazing characters travel through so it was full of rich and wonderful memories.
Alan Fleischmann
What was the closest big town?
David McCormick
The closest big town probably was Williamsport or Scranton. Maybe Scranton. And that was where some of the big shopping malls were. So when we had to get school clothes, we’d go in that direction for shopping. And you know, it's probably only two and a half hours from New York City, but it feels 1000 miles.
Alan Fleischmann
Did you ever go back? Have you gone back?
David McCormick
Sure I have. My mom and dad have a family farm. They don't live there, but we've kept the farm and I I've since bought some other farmland around that. And so we've got a farm there. And a local farmer farms the land and we rent the barn and the house to some people with horses and it's going to be a part of our lives. Surely a part of my life, hopefully, my kids’ lives. Because it's a really good reminder, when you go home, there's nothing like going home. And you see your old friends and one of my closest friends is a local sheriff. Another one of my friends went away to join the Secret Service and has now since come back. In my high school class, I think there were three kids out of 120, who went away to college. And then the majority of them either went right to work, or they went to community college or some surrounding places. And many of them settled nearby. So far more stayed than left.
Alan Fleischmann
Wow, that's wonderful. In terms of the values that you got from that, I guess the values you got from your mom and dad in particular, you mentioned that you saw them leading. Both of them at the campus level, but it sounds like even in the greater community. But what other values like, when you think of your mom and your dad, that it becomes a part of who you are? Both as your public part of your life, your professional part of your life, but also as a parent?
David McCormick
Well, I think the thing I admire most about both of them is you hear the word servant leadership. What exactly does that mean? But for them, I think it meant that I saw this, it really was about the institution, it was about the kids. And the thing, the thing that I loved is that they would walk through the campus and fulfilling their jobs and the communities. You know, he was the president of the college in the college town. It was a big deal. But he and my mom, they both have a capacity to genuinely connect with anyone. Whether it's a freshman kid, whether it's the janitor in the building, the local mechanic, or the fancy person. I mean, when we were at the university, Alex Haley came and had dinner at her house or Sam Ervin, who chaired the Watergate hearings. They would come to the house and the relationship and the connection was Sam Ervin or Alex Haley, the way they treated him or them was very much with the same quality of engagement and respect as the janitor in the dining hall. And so that ability to sort of connect with people no matter who they were, where they came from. Whether they were inner-city kids from Philadelphia or rural kids from the coal region and the genuineness of that was a real inspiration, a real value that I've tried to maintain and keep going forward. And then trying to make sure my kids have because my kids grow up in a much different environment than I did, much more privileged. And so I don't want them to lose that capacity to connect with everyone and the genuineness that goes along with that to.
Alan Fleischmann
think of you I think of a person with great humility. And one of the funny stories for me is that I know that you were a captain of your football team when you were in high school, and you're the first to tell me that you may not have been the best or most experienced player. I'm curious, what's behind that story a little bit? And why do you think that coach picked you then? Because if you're not the best, then how did you to get to be captain?
David McCormick
Yeah, well, this is you and I've talked about mentors in the past, and there's a half a dozen people who really loom large in my life is, is people who have made a profound difference. And the gentleman you're referring to was a guy named Tom Lin, who was the new football coach for the high school, my junior year. And so in his preparation for the taking on the new team, he went and he would look at, he looked at all the films from the previous year, of the varsity football team, and I was a sophomore, but I was on the second team. I was 13, or maybe 14, in playing. But at the end of some of the games, either when we were winning, or losing, significantly, they would bring in people who were the benchwarmers. And, and I would get brought into the game. So there were probably seven or eight games where I got to play the last five minutes or something like that. And he kept seeing in these films that this guy would come in, I think my number was 23. And this number 23, who he didn't know because the name wasn't well known, was killing himself on the field to make the tackle or make the block or do whatever it was not only successfully, but always with a lot of heart and determination, and sort of a willingness to do whatever I could do to be successful. And so he called me over the summer, which was a surprise to me because I didn't know him. And I certainly wasn't one of the best players. And he said, Listen, I've been watching the films, and I think there's a position for you on the team. This is coming year, I want to put you in this position on defense, which was the middle linebacker position. And so we went into the summer camp, which was two weeks of training where you did two or three practices a day. And in the course of those two weeks, I sort of started to find my find myself in terms of being successful. And really, his support for me taking on that position, I think gave me some confidence. And I had a good summer camp. And he pulled me aside along with another guy at the end of the camp. And he said, I've been thinking about it, I'd like to make you co-captain.And the idea that I would have been the co-captain of the team would have been really inconceivable to me. It just wasn completely out of the blue. And I remember telling my parents about it. And the only one more surprised than me was my dad, who wasn't a big football fan, but knew that this was an unlikely turn of events. And that really changed everything. First of all, everybody looked at me differently because all of a sudden, I was the junior along with another guy who was the co-captain. So that was interesting. But I started to look at myself differently. In the sense that, here was this coach that really had a reputation for being a real hard-nosed coach, and football and in northeastern Pennsylvania is like football in Texas, I mean, this is the local focus. I mean, on a Friday night the stands are packed and everybody goes to the football game. And so all of a sudden, I saw this guy saw something in me that I didn't really see in myself. And I think it was commitment and leadership and a willingness to really put myself out all into whatever happened. And to make a long story short, that worked out. Well. We became a great team. My senior year, we were the regional champions and won, I think, all games but one or two and it was really a defining moment in my life.
Alan Fleischmann
You know, it's amazing to me. One of my favorite movies of all time is the movie Rudy. Where Sean Astin was playing Rudy and the tenacity. And when I heard the story about you, I always thought about Rudy. I think that there's something about, at the end of the day, grit and tenacity and persistence matters. But to your point, how one mentor can change your life. You look at yourself differently, you think of yourself differently, did that also play a role in you go into West Point? All of a sudden, did you look to your life differently?
David McCormick
Yes, it sort of did indirectly. So you know, I played football and wrestled and football ended up being a good sport for me. And I did well, and I got recruited to play football at West Point. And so I went up and visited a couple of times, and got recruited to wrestle as well there. And I remember going to West Point, it just seemed a little off-putting. I didn't have military in my family. And to not go too far into the story, but I stopped for breakfast on the way up for the recruiting visit and got sick while I was there. So I had a bad impression of West Point. And I really didn't have any connection to the military. And so I didn't think it was the place for me. I applied to Penn State and Lehigh, and a couple of other places, which I thought would be more in line with me. But my dad, to his credit, insisted that I apply. He said, You don't have to go. but apply. You never know. And so I applied and was lucky enough to get a nomination for my senator. And got accepted. And when I got accepted, something really remarkable happened, which is, I wasn't sure what I was going to do, but people knew that I had been accepted to school new, and it sort of became known in the town that I was accepted. And the presumption of everyone was, of course, you're going to go. There had been nobody in the last 10 or 15 years that had gone to an academy. And all of a sudden, it just sort of took on a life of its own where of course I was going to go to West Point. And how could you not go to West Point? What an honor. And I went not very clear and coherent about why. And also not at all clear that I wanted to be an army officer. And that decision, which I made with such lack of clarity became one of the best decisions of my life. Because West Point turned out to open up the world to me in ways that I don't think it would have happened otherwise, and just became a great experience, followed by the army, which was an amazing experience. And so I feel fortunate that I that things tipped the way they did.
Alan Fleischmann
Your brother followed you into West Point too, if I’m not mistaken?
David McCormick
Right. My brother followed me but with dramatically more success. I ended up being a decent student at West Point, but certainly wasn't that at the top of the class. Doug ended up being at the top of the class. So he's first in his class at West Point. And he became the first captain, which is the most senior cadet, which, famous people like MacArthur and others have been the first captain. AndI was the captain of the wrestling team at army and so was he. And so he did exceptionally well. And I remember my dad who was large in our in both of our lives, but I remember my dad, at one point pulled me aside when Doug had achieved all the success and in a loving way that only a father can do, sort of asked what happened during my years. Had I been screwing off? Had I spent too much time partying? What accounted for my relative lack of success compared to my superstar brother?
Alan Fleischmann
Has he taken that back over the years?
David McCormick
It's been a long-standing joke because there have been five or six key decision points career-wise, where I've always sought his advice or he has always given this advice. I'm not sure which way it went. But he was opposed to a number of these choices about leaving the army and some of the other things I did, and they ended up working out reasonably well. And so he's now started to concede that his track record is not 100% but it.
Alan Fleischmann
Might be something in the McCormick water between you and your brothers though. He can take a little credit. He was the guy who said apply.
David McCormick
Exactly.
Alan Fleischmann
He probably had some vision that he didn't actually disclose.
David McCormick
Yeah, for sure.
Alan Fleischmann
He saw the rest of this and you knew that he wasn't going to change but maybe he thought he could tame a little. I don't know. But you went off to the 82nd airborne, which, when you think of the officers in that unit and how many went on to success. Not only in the military, but in the private sector. Is that a coincidence? Or is it again, kind of like it was in the water? Or there's something about the training, the leadership skills that were taught to you, that you and others actually kind of held on to for other parts of your lives?
David McCormick
Yeah, well, the 82nd, as you said, very storied history of World War Two and jumping into D Day, and it's got a lot of a spree and a very elite group of soldiers that serve there. So it's a real privilege to be able to go there as an officer in the army in general, and 82nd in particular. I mean, it's an amazing thing as a 22-year-old, just imagine this, you show up, you go to airborne school in Ranger School, and then you show up at the 82nd. And you're a platoon leader. And as a 22-year-old, you're assigned 25 soldiers. And at that point, they were all men. It was a male unit because it was a combat unit. This was in the late 80s. And you have a black kid from Newark, you have a Hispanic kid from Miami, you have the young man from Arkansas, Alabama, you have the college dropout from Boston. And these people couldn't come from more varied backgrounds. They couldn't come with a more varied interest. And yet they come together in service to the country in this unit. And ultimately, what you see is all the differences blend or fade away rather. And it blends into this coherent team, a group of people who have a mission, and they look to this young 22-year-old, there's usually a salty platoon sergeant who seemed ancient at the time, but in retrospect, was probably 35, or something, who had seen it all and that his job at that point was to make sure the 22-year-old didn't run things off a cliff. And so you have this amazing experience, to lead, to learn, to grow. Your leadership's tested. You fail, you learn. And all of that becomes the basis for everything that follows, I think, in life, because that leadership experience is unique. So I went to a unit called the 307 Engineer Battalion, which I was an engineer. And this was a group that was in an airborne unit. And it had a very famous lineage in World War Two where it had crossed the bridge at Remagen and had done all these amazing things, many heroes from the past. And we had a great group of officers, probably 20 officers, and a colonel named Carl Strock, who was a real inspirational leader. And that group went to the Gulf War together. And we were deployed for almost a year to Saudi Arabia and then Iraq. And as you said, part of the first wave into Iraq, on the western flank sort of moving towards the Euphrates River. And that group of people, while we haven't stayed that connected, have gone on to do great things. So Colonel Strock became General Strock. I think there's probably, among those, 25 additional officers who went on to become generals. There were a number of us who left after different points in our military career. And a number of them have gone on to be very successful business leaders. And I think we all look back on that time, in the military that time and at the 82ns, that time in the 307, as a great privilege and a great opportunity to be with terrific leaders who were inspirations and also role models.
Alan Fleischmann
You're listening to Leadership Matters on Sirius XM, I'm your host, Alan Fleischmann. I'm here with David McCormick, the CEO of Bridgewater, the largest hedge fund in the world. And he's had a varied career wirh great accomplishments. And right now we're talking about him in the 82nd airborne, his military experience as a graduate of West Point. Are there things in that year that you were in the Gulf during that period of the Gulf War that changed you? I mean, I'm sure it has to be yes. And obviously changed you in a way that made you go into a different trajectory, changed you and the way you looked at leadership, changed you in the way you looked at being a leader yourself.
David McCormick
Well, it surely did. I mean, if you go back to those days, there weren't letters. There wasn't email. There weren't cell phones. So I don't know. I probably had two or three satellite phone calls with my parents in the course of that year. And letter writing was the way we communicated, so getting the mail every day was a huge thing. And I was a prolific letter writer, and I've received lots of letters from friends and family. And it was really a time to reflect on everything. Yeah, I was a young man, I was 26 at the time. And you know, if you remember back to that time, it seemed like this could be very significant military, the casualty projections were 50,000 potential US casualties. There were the Scud missiles with the nerve agents that were in the Iraqi arsenal. And it ended up being much more of a one-sided conflict than it than had been expected. But I remember writing the letter that you would give to your pal, to your parents about saying goodbye, if something happened in combat, I remember sending tapes to my parents at Christmas, and to my family at Christmas, because that was the way you would be able to communicate. So it really forced a reconciliation of Hey, what kind of life do I have and what kind of life do I want to lead. A bit of that. Also just reinforced the importance of leadership in times of duress. You can imagine the stress that people feel in that environment and trying to keep people steady, trying to keep both the seriousness about our situation and what needs to happen, but also a lightness about how to deal with the crisis and an objectivity around what needs to happen. And I think in the end, although I didn't know it at the time, it really both led me to realize what a privilege it had been to be in the military. But also, as I thought about my life, ultimately, the decision to leave the military. I left about a year after coming back from the Gulf War. And I think that experience, which at the time seemed probably one of the most remarkable experiences you can have as an army officer. It made me realize that I felt privileged to have that experience, but also wanted to probably try something different.
Alan Fleischmann
And when you did decide that the years of service were behind you, what did you decide to do? You became a tech entrepreneur. But that was that right away? Or is there a gap between?
David McCormick
No, I went to grad school. And there’s two dimensions to that. One is, when I had left West Point, I hurt my knee really badly my senior year. So I had to get knee reconstruction, which Westpoint kept me around for six extra months. And, and so the GI Bill allowed me to take classes at Columbia at the time. So I took two classes at Columbia. And one of them was with a fellow named Roger Hillsman, who is a very famous guy who had been a West Point graduate who had been in World War Two, had had a very distinguished career, had gone into the OSS, which was the precursor of the CIA. And then gone back to become a professor, an academic, and then went and served President Kennedy as his assistant secretary of state. So this guy taught this class and it was like, I don't know, it was like sitting in class with Indiana Jones. That's what it felt like. You'd sit there and say, What a life this guy has had. He just had these amazing stories. And I thought to myself, when I was sitting there, this was right at West Point, that is a life. That is the kind of life that I would like to lead. And I had been an engineer, but when I was later in the army, I thought I wanted to apply to grad school and potentially try to pursue some path like Roger Hillsman. So that was in my mind of going to grad school and maybe doing a master's degree, maybe doing a doctorate and so that was one thing that sort of bloomed. The second thing was, given the timing when I left the army, I had a lot of leave build up because I had been in combat for a year. I've been in the Gulf for a year. And so I resigned, but I was able to exit the army in November of 1991. And graduate school didn't start until September of 1992. And so I had 10 months of time, and really wasn't sure what to do with it. In the end, I bought an around the world ticket from TWA, which was $5,000 at the time, and I had the money saved up from the year that I had been in the Gulf. And the ticket worked where you could take as many flights as you wanted, as long as it went in the same direction.
Alan Fleischmann
That was an amazing program.
David McCormick
It was an amazing thing. And so I didn't know where to I didn't know where I was gonna go. I sort of had some general idea. And so I flew to Greece, and then went from Greece to Turkey by ferry, and then literally hitchhike my way through Turkey to the Syrian border. Went into Syria, Jordan, Egypt, Israel. That took about four months and then flew to Asia, and spent another four months in Asia, including China, and then went to grad school. And that year of that experience was, I'd say next to the year in the Gulf, that was probably the second most defining period in my early life, because I met lots of friends, I read lots of books, I pursued lots of adventures, and all those things came back later in life in very important ways.
Alan Fleischmann
What year was that?
David McCormick
91 to 92.
Alan Fleischmann
So even with that, you still were kind of isolated like you were in the Gulf. It wasn't like people had smartphones, and now you're an email or that you're constantly texting. I mean, people have to remember. So it's not just that you took this year off, it wasn't really a year off the way you describe it, but you took this year to explore. But you really were on your own.
David McCormick
I was on my own, I would call check in on my folks by payphone every three or four weeks. And I had applied to grad school before I went, but I didn't know if I was gonna get accepted anywhere. So I keep calling back and said, did any letters come back? And then finally, I got the word in something like April, I think, that I had been accepted to Princeton. And so then I knew what I was coming back to. Prior to that I wasn't sure what I was coming back to.
Alan Fleischmann
What a great liberating feeling for you to know that during that year of adventure, I would argue, you actually knew that you weren't just throwing away the future. You knew you're going home to the Woodrow Wilson School.
David McCormick
It was one of those things—back to my dad. Couldn't disagree more with leaving the military. Because that was a great career, and there was a pension and all that stuff. So he was very high on that. But then to leave the military and then screw around for a year traveling around the world was just the height of irresponsibility. So that was the second point of contention,
Alan Fleischmann
Am I right to say that also Woodrow Wilson School is obviously it's one of the best schools of international relations in the world? But it's also sought after because it often pays for students, it's one of the most well endowed, and you hear about these endowments of universities that they don't do much with them. But when I hear about Woodrow Wilson always is that not only do they go after the finest, but they pay them to be students?
David McCormick
In my case, I felt really fortunate to get in and it just ended up being the perfect place for me. They were very supportive. And I ended up finding a couple of professors that were great supporters. And that led me to stay and do a Ph.D. there. And again, if you had a sort of asked me in my days, in Fort Bragg whether I'd somehow ended up at Princeton and be able to complete a Ph.D., let alone get in, but then complete a Ph.D. that wouldn't have thought that was highly likely. But it just, it just worked out well.
Alan Fleischmann
I sounds like the scrappy kid who didn't think of getting to West Point probably wouldn’t have imagined in high school that he'd be going to Princeton at the Woodrow Wilson School just a few years later, either.
David McCormick
For sure. And I mean, this wasn't idle speculation, I had the GPA to prove it. This was not some I'm I justified lack of confidence, there was reason to believe that this was an unlikely proposition.
Alan Fleischmann
Well, that's amazing. You're listening to leadership matters on Sirius XM. I'm your host, Alan Fleischmann. I'm with David McCormick, who's the CEO of Bridgewater, the largest hedge fund in the world. We'll get to that in a minute. We've been talking about your military experience, and then this adventure that you took on when you knew you were going to go to graduate school. And then you went to Princeton to the Woodrow Wilson School. It sounds like that example, that adventure you had when you were studying at Columbia, this idea already got in your head that you wanted to be a private and public life. You obviously went for a degree that wouldn't give you that credential. You certainly had that background. Did you go right into the private sector after that?
David McCormick
Yeah. Well, it just didn’t work out in ways that were expected. When I was at Princeton, I thought early on that I might be an academic, I might follow my dad's footsteps to some degree on that. And in the end, I realized that while I finished the Ph.D., and I really appreciated it, that wasn't my absolute strength. And my brother was in Harvard Business School at the time. And so I went to visit him, and the guy that lived next door had been at McKinsey, and I was trying to figure out what to do with my life. The guy next door said McKinsey hires PhDs, not just MBAs. There's like a program where they have PhDs. And I said I've never heard of that. So that's fabulous. And I applied and got an offer. And when I talked to the folks from McKinsey, they said, Listen, there's a possibility in New York, Chicago, where would you want to work? And I said, Pittsburgh, I want to work in the Pittsburgh Office. And not only do I want to work in the Pittsburgh Office, I insist on it, or I wouldn't want to come. And they said, I don't think we've ever had anybody be quite so insistent on Pittsburgh.
Alan Fleischmann
Your Pennsylvania routes again, exactly.
David McCormick
But the reason was, I had imagined that I might try to do something politically, and thought that coming back to Pennsylvania, I'd be able to figure that out. And so I moved to Pittsburgh, I was a registered Democrat, went to McKinsey, but with the hope of finding some combination of public life and private life in Pittsburgh, and spent the next 10 years of Pittsburgh. It's where three of my children were born, I met my tutor at Princeton, my statistics tutor, ended up being my girlfriend and my confidant, and my partner, and then eventually my wife. And so we got married and moved to Pittsburgh. And I quickly found out that I loved McKinsey, that was the greatest thing in the world to be McKinsey Pittsburgh because it had a very special feel to it. And I also learned that the Democratic Party, at least in Pittsburgh, it was very hard to penetrate. It was very hard to get involved. There was not the opportunity or even the alignment, as I tried to think about the ways to contribute. And there was this guy named Jim Roddy, who was a telecom executive who was running for county exec, which is a big deal in Allegheny County in Pittsburgh. And so I started to help him on his campaign. And while at McKinsey, got involved a bit on the on the margin and changed my party registration. This must have been 97 timeframe and became a Republican. And in the end, he won eventually and did a great job of leading the county government and doing some of the reforms that he had promised. And that was really the way that I both got involved politically, for the first time, and then ultimately made the transition to be a Republican.
Alan Fleischmann
Interesting. That was probably a big decision to make. And obviously, when you think about what came after serving in national government, federal government, obviously, that was a big decision you made. The great John Lennon quote, Life is what happens when you're busy making other plans. There's so much about your life that you're just telling us about right now, where it's there's so much serendipity. I mean, you obviously there has to be you seize the moment, you seize the opportunity, but you have been so open to opportunity that frankly, if you had sat down and said, I’m gonna plan it, it never would have happened.
David McCormick
Yeah, absolutely. Yeah. Absolutely. That I think that's right. And I think that notion of being open to the possibilities and not being too anchored. One might call it a lack of direction. On the other hand, the openness to interesting opportunities. I'd like anyone else wanted to be successful and so forth. But I had this notion that if you had to crystallize the kind of life I wanted, it would be an epitaph. It would very much be around an incredibly interesting life. Back to Hillsman. Hillsman had an amazing success. But more than that, he had an incredibly interesting life.
Alan Fleischmann
You had a role model. I love that Indiana Jones. You're like, I want that life of adventure. And he travelled and all these great things along the way. So you went to McKinsey, you’re now and McKinsey how many years before you left?
David McCormick
About three and a half years. And there was a group of McKinsey folks from different places that came back to Pittsburgh to start a business called Free Markets. And McKinsey started to work with Free Markets. And it was essentially the first generation of online companies in the business arena. And it helped big industrial companies which I've worked with closely buy direct materials, so buy the things that went into their products online. And this was an innovator. So I eventually left McKinsey to join them and it became a Rocket Ship IPO, one of the biggest IPOs in history. In the moment, it was in Pittsburgh. So you can imagine all these big IPOs were happening in Silicon Valley. But this was the big deal in Pittsburgh. So I became one of the executives there. And eventually, we took it public and I became the CEO. We lived through the tech bubble bursting. So our market cap went from many billions to many hundreds of millions. And so we lived through that challenge. And ultimately, I was the CEO. And I sold the company for a significant amount money, $500 million at the time, to another company, which I became the president of and then helped run that for a couple of years. So it was sort of one of these moments in the center of the tech bubble bursting.
Alan Fleischmann
The rodeo ride that it all was about.
David McCormick
Which again, was a great test of leadership on both sides. The euphoria on the way up and keeping things in check and keeping people focused, and the challenges on the way down and ultimately leading through that period, it ended up being a big deal in Pittsburgh. We had about 1000 employees in Pittsburgh, we had a building in Pittsburgh with a with our name on top. And this was part of the transition of Pittsburgh, from being an old industrial town to really being a tech innovator with a.
Alan Fleischmann
Melon, I guess is there.
David McCormick
I mean, the recovery was underway. But I would say that I had the good fortune of being in Pittsburgh during the inflection point where you could see the robotics the quality of the professor's, the startup community, the venture capital coming in the rebuilding of the downtown, the rebuilding of the south side, the evolution of the biotech through UPMC. I mean, it stands out in my mind, and I have been there for more than 10 years, more like 15 years now since I left, but it stands on my mind is a great story over renewal and reform and transition to the new economy, hopefully, in ways that other parts of the country will be able to do.
Alan Fleischmann
Now I remember several years ago, being in a room with the folks who were so, like yo,u loving your Pennsylvania loving and Pittsburgh. And we're describing how all the great movies that were trying to film San Francisco, that actually Pittsburgh had been so redone and rebuilt, that it was a prettier version of San Francisco. So rather than setting out Cruz to San Francisco to film San Francisco, they were sending crews to Pittsburgh to film San Francisco, because it was beautiful.
David McCormick
Yeah, there's a big move. Actually, there's a fairly significant number of movies that have been filmed there. And t's a wonderful place. I mean, one of the bittersweet parts of moving on into government and public life in the Bush administration was leaving Pittsburgh, which is really one of the best communities.
Alan Fleischmann
You went from there. I mean, there's so much to unveil there about your experience of both going up and down during the tech bubble. I'm sure you can relate to today, going through the pandemic, because there's nothing like riding a roller coaster up, but the gravity going down and making sure that you're actually not only are you responsible for your own leadership team, but for all these employees, but you've dealt with adversity. Even in government, before we get to Bridgewater, which I want to get to. You served, I don't know many people that served the way you served in the Bush administration. You were in the White House, you had a significant job as Undersecretary of Commerce. And then you were also Under Secretary of Treasury for International Affairs. And there again, some great moments, but it was also during another wartime, and then you obviously dealt with the 2008 economic troubles and challenges as well. And that's actually when I first met you, actually, was when you were still in that role. And I was part of a transition. And I met you before, but that was the first time that I actually saw you in action. And I remember how you were all about bringing people together and you firmly were respected and had the voice of the president and obviously, the administration, but you also were very much about results in collaboration and you brought people together, frankly, that didn't always come together. But that experience must have been—going back then to y our role model of Indiana Jones, but now you're now you've gone to the rodeo, the private sector, the tech industry by well, and now you're in government.
David McCormick
Yeah. Well, the government—I'd always had this bug to try to serve. And when Governor Bush was running, and if you remember, his theme of compassionate conservatism really appealed to me. There's a lot about him as a man that appealed to me, although I didn't know him at all. I helped him with the campaign when I was still in Pittsburgh. But when the President won, I really wasn't offered anything. And I didn't pursue anything in terms of his first term. So I things worked out and my timing was great for the second term. And so when I joined the second term, as you said, I went to the Commerce Department, but for a bunch of reasons, there was a job open in the White House where I was the Deputy National Security Adviser for Economics, which spends a lot of time with the President and travels with the President and goes to all the summits and negotiates on his behalf. It's really one of the most remarkable jobs in Washington, and I really didn't know the President. So I was in this position where I'd met him a handful of times, but I was with him a lot, and one on one. And he's a wonderfully warm and funny guy, but he's not an easy guy. And he's tough. And he doesn't pretend. The warmth that eventually comes becomes a real relationship. I have a whole range of funny stories, but I remember walking into the White House every day with this sense of like, I really can't believe. I just can't believe this happened, I cannot believe I am here. And that I had the opportunity to do the things I'm doing. And every time I walked in the Oval Office, and I went hundreds of times, I suspect that certainly many, many, many dozens of times. Every time it would, it would be a tingle. And I just could not believe that here I was. And it's one of the great memories of my life. And also seeing him and then seeing Secretary Paulson, dealing with crises, the financial crisis, and really being in the middle of that conversation, seeing how the president dealt with it, seeing how he put, really, the country over politics. Did a number of things very unpopular politically because he thought that was the right thing to do. His leadership internationally. And then the way Paulson dealt with the crisis. And the degree to which he grabbed the bull by the horns in terms of a response. And I don't think it would have worked without his leadership, but also without Bernanke and so forth. I have a funny Bernanke story at some point. And also the fact that Paulson embraced the fact that he didn't know what to do sometimes and made mistakes. And one of his great, great gifts is that he would see the mistake, own it, and move on. And what you learn in that is in a crisis, you're never going to get it. You don't get it right, right on the mark.
Alan Fleischmann
You got to be decisive and try.
David McCormick
You have to be decisive, see what works, learn, and get it right.
Alan Fleischmann
And then own it.
David McCormick
And then own it and have the humility, and not let your ego tie you up into whatever you decided two weeks ago.
Alan Fleischmann
and you think that Hank Paulson had that because he had been a CEO? Goldman Sachs. And he's obviously been a legendary CEO himself. And now he's Secretary of Treasury. So he kind of knew you had to take some risk.
David McCormick
I think he knew the thing that we used to say in the military, which is a good plan, executed aggressively and violently is better than the perfect plan executed later. So in other words, grabbing and take and then learning as you go. And that's what I think he did brilliantly. And if he had waited, or if the policymakers had waited, I think that the economic destruction would have been much more significant. And it's not clear whether we could have pulled it back the way we did. So lots of leadership lessons.
Alan Fleischmann
You've been in so many moments of, of enormous change, and obviously, even crisis we had during that period. Obviously, the financial crisis. You lived through the tech bubble crisis, as a CEO as well. You’re listening to Leadership Matters on Sirius XM. I'm your host, Alan Fleischmann. I'm here with David McCormick, the CEO of Bridgewater, the largest hedge fund in the world. And, gosh we need two hours, not one and now realizing. You'll need to come back to talk about some of those stories that I can get you to share if we have more time to. But let's talk about Ray Dalio and then your decision. People remember you as the undersecretary of Treasury. I mean, you were very well respected, very well known. You're one of the very few leaders, while you're very clear that you're Republican, you're highly respected both from Republicans and Democrats as somebody who is results-driven and a collaborator other skills I'm sure you honed in that job. And I'm sure you honed when you were CEO of two companies. But I'm sure you learned them being a mentee, and then certainly being in the military. But I imagine that was a big deal decision coming out of government, and then figuring out not only do I want to join Bridgewater in a senior position, but you decided to do it working for or working with, and then eventually succeeding as CEO, a rather legendary man in finance and business and Ray Dalio, who, if for all the listeners, if you remember, not only is he a very successful legendary investor, but he's also the author of a pretty amazing book called Principles, which really does get into the DNA of what's important in life, both professionally and personally. So that had to be a big decision because you had your identity. You're a strong leader, you've already been tested. But there must have been something about Bridgewater as kind of another new terrain or new frontier you wanted to conquer.
David McCormick
Yeah, when I was coming out of government, I wasn't sure what I wanted to do, I took six months off and just tried to decompress a bit and get reconnected with my kids and my family. And I had another job that made an offer and I was seriously considering, but I kept having these ongoing conversations with Bridgewater. And I had an initial conversation with Ray where I didn't feel great about it. And I don't think he felt great about it. And I thought, well, this isn't gonna go anywhere. And he suddenly called me and said why don’t you come back. Let's keep talking. And it was a very ambiguous role. There have been a legendary group of senior people who had come and left. It wasn't clear at all what Ray was looking for. He's both a wonderfully generous and gracious man and extremely difficult. I think he would acknowledge that. I remember at the point, we had a sell dinner where he had made an offer. And we were going to talk about whether I was going to do it or not. And just the two of us had dinner, and at the end of the dinner is part of his sales pitch. He said I think you've got a great chance of this being terrific for you. Very successful. I give the odds 50/50. And that was his sales pitch. Which is, he thought there's a 50% chance this was gonna work out. And I remember thinking to myself, these are incredibly smart people. They're incredibly high-integrity people. I'm not sure it is gonna work out. But if it doesn't work out, things will be fine. And I'll go do something else. And if it does work out, this is going to be a great adventure. And fortunately, things have worked out. I was unsure about it, though. So I kept my family in Washington for a year. And I commuted back and forth every week. And over that year, we traveled a lot together and got to know each other. And ultimately I transitioned into a bigger set of roles and ultimately, CEO three years ago, but it's been great adventure.
Alan Fleischmann
I mean, 10 years later, I mean, it is amazing. But what's amazing also, Dave is that you have not stopped your leadership in civil society or in public life. I mean, you are the CEO of the largest hedge fund in the world, and certainly one of the most respected investment firms on the planet. But you also just wrote this incredible piece, which I call the McCormick Doctrine. And I know you wouldn't I agree, because I know your personality, but it's about economic might national security, the future of American statecraft, which is a 37 page hefty doctrine actually, that really talks about all the things that you've done. I mean, all the things you've lived through, I mean, how do you make sure that we're advanced in strategic technologies? How do you modernize the economy? How do you make sure we have a military that's actually focused toward the future? You're the the chairman of the International Board of the Atlantic Council, which is highly prestigious. You're on the board of the Aspen Institute. You are involved in so many causes. You're a mentor, as well as a mentee. I would love to go deep on this. On what you just published. But I wouldn't want to end this without a moment or two mentioning family again. We started with talking about your mom and your dad. You married an amazing woman in Dina Powell-McCormick, who's a formidable force in the world and business, but she's also a formidable force when it comes to women empowerment. And you are the father, collectively, of six daughters. I'm the father of two. Of two daughters. And I know that a huge part of your life is empowering others and being a mentor. And I gathered hearing you talk on this show, and I know you so well, hear your talk elsewhere. You know, you were the great beneficiary of being a great mentee. And I'd love you just to wrap up for a minute just talking about why mentorship matters so much to you. Obviously, you're grateful for the journey you've been on but and we've heard that on the show. But a lot of it has to do with the fact that it is that ripple effect, is that idea that it is that coach, it is that moment where somebody sees something in you that you don't see that actually can have a ripple effect and change one's life. But I'd love to hear you tell me because I am very humbled whenever I hear you talk about it.
David McCormick
Well, thanks. I mean, I've recently had this moment where I did a family history for my folks, where I went back and got some people to help me do it, essentially a documentary of many generations back. All the way up to my parent’s lives, and the key parts of their family. But in the course of that, it was really a moment of reflection because you basically start to think about your own life a little bit. And two sorts of questions came to mind. One question was wow, what are those five or six people that I mentioned, or six or seven that made such a difference? Am I being adequately grateful for that? I really thought about that, and recognize how important they were to me. So I've had some time recently to think about that. But of course, that brings the next question to mind, which is, what am I doing? Has it been sufficient sort of to pay it forward? You know, you work so hard to be successful and achieve and so forth. And then there's a moment which you realize, boy, things have gone better than I could have hoped. Am I doing my part? You know, the ways you're saying. Civil society, so forth, but am I doing my part as a leader and mentor, and to help others the way I've been helped? And I say, as I'm looking back, I think, in some ways, yes, but in some ways, probably not enough. And so one of the things that I'm thinking about is how to really double down on my efforts. And the thing about mentorship is that you can do it in very distinctive, customized ways, depending on the people involved, and it can be very light touch. But the right word of advice, the right, not presumptuous, but the right sort of perspective from someone who's lived through some things that they may be living through, or has made some mistakes, which you can share is of great value. And so you can talk about waving your hands around poverty eradication, or helping veterans or all those things, which I'm trying to do in a variety of ways, but then you think, tangibly, who are the people in my life that could look to me, the way I hope to those six or seven people who made all the difference. And I'm hoping I can do more to ensure that's the case.
Alan Fleischmann We talk a lot on this show about CEO statesmanship and how the CEO of today has to live a life in public life in a way that, frankly, maybe didn't have to 20 years ago. And certainly is required to actually understand both public sector as well as public policy and private sector and the role of civil society. And I know that we didn't talk enough about probably the pandemic and all this stuff that you and Bridgewater are doing around that, but I can certainly say, and I know that people who are listening got witness of that today. If we're talking about the future leaders of tomorrow, we need people who understand the private industry, who understand the military, who understand public life, and understand civil society, not many do. So I imagine this scalable initiative that you're going to be a part of your life and mentoring will include all the above which is probably the greatest legacy of your dad, of Hillsman. And a few generals you had along the way, and certainly a legacy for your daughters as well. This has been a joy. I'm not joking when I say if we had another hour, we wouldn't even have enough time. So I'm going to urge you to come back. So we could talk maybe a little bit about that mentoring program, honestly. And really kind of distill what it would be about or any of your ever efforts to kind of link private life, public life, and civil society.
David McCormick
Just one final word on that, which is that I think the way that's all come together for me at this point is with Dina. Where like that partnership and ability to have she and I think together about what a meaningful contribution is and what a meaningful life is. That's sort of the piece of the puzzle that's brought it all together in a way that it wasn't before. So I guess that part of it really makes all the difference.
Alan Fleischmann
Finding the right partner in life and then building your life around them, that is probably the single best decision a human being could ever make if they're so lucky.
David McCormick
That's right.
Alan Fleischmann
Yeah. And knowing you and knowing Dina, there's a pretty formidable duo in both of you. And the best is yet to come. So thank you, Dave, for joining us today.
David McCormick
Alan, thanks for having me.
Alan Fleischmann
I love that you're on Leadership Matters. It's been a great conversation. And as I said, the best is yet to come. Please come back. Thank you. Talk to you soon.
