Kabir Sehgal was a vice president in emerging market equities at J. P. Morgan. A Grammy-winning producer, he has performed with Grammy-winning musicians as a jazz bassist. He co-founded an arts organization which merged with the Afro Latin Jazz Alliance. He is a graduate of Dartmouth College and the London School of Economics. And he’s a fan of the Atlanta Braves. He is the New York Times and Wall Street Journal bestselling author of Coined: The Rich Life of Money and How Its History Has Shaped Us, Walk in My Shoes: Conversations between a Civil Rights Legend and his Godson on the Journey Ahead (with Andrew Young), A Bucket of Blessings (co-authored with Surishtha Sehgal), The Wheels on the Tuk Tuk, and Jazzocracy: Jazz, Democracy, and the Creation of a New American Mythology.
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Morris: Before discussing Coined, a few general questions. First, who has had the greatest influence on your personal growth? How so?
Sehgal: My father. He left India at a young age and moved to the United Kingdom where he swept floors. He saved up enough money and attended university in the United States. He embodies the American dream, and I am still amazed with his tenacity, courage, and resiliency.
Morris: The greatest impact on your professional development? How so?
Sehgal: Ambassador Andrew Young or “Uncle Andy.” After Hurricane Katrina, I wanted to go back to New Orleans to help musicians return to the city. But Uncle Andy advised me, “If you want to help people, go work at an investment bank.” His contrarian advice opened my eyes to the importance of capital. “Learn how to make some money before you give it away.” I learned that you can bring about good in the world especially if you have a paycheck.
Morris: Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.
Sehgal: During graduate school, I started a company with my friend in India. It was doing well, but we ran out of money, so I took a job writing computer code at J.P. Morgan, and sent my pay checks to cover the growing costs of the startup. But ultimately, our company failed, and I remained at J.P. Morgan. I never wanted to work in finance, but I was there, and then the 2008 financial credit crisis began, and I thought that I had an up-close view of what was happening. Thus began my career in global capital markets.
Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?
Sehgal: At every level of school, I’ve tried to write. In elementary school, I helped start my class newspaper. I wrote in high school. I wrote columns in my college newspaper. And in graduate school, I helped start a student academic journal. Also, I made sure to take classes where I could become a better writer and a more disciplined thinker. So much of business boils down to communicating clearly and effectively, and the writing courses and English teachers taught me a lot along the way. Yet, I still have a long way to go in terms of writing.
Morris: What do you know now about the business world that you wish you knew when you went to work full-time for the first time? Why?
Sehgal: That it’s OK not to know everything. When the global financial crisis began, I didn’t know that much about capital markets: stocks, bonds, and currencies. And then I realized that many people who work in banking, even those who’ve been at it for many years, aren’t masters of their craft – because there’s just so much to know when it comes to the market. It’s OK to say I don’t know. Realizing this earlier in my career would have put me more at ease.
Morris: Of all the films that you have seen, which – in your opinion – best dramatizes important business principles? Please explain.
Sehgal: It’s a Wonderful Life. It illustrates that if you treat your customers with respect, they will recognize you and even help when you’re most in need.
Morris: From which non-business book have you learned the most valuable lessons about business? Please explain.
Sehgal: Albert Murray’s The Omni-Americans because it discusses how you have to draw upon everyone’s creativity. America is a mash-up of cultures and traditions, and great businesses know how to tap the strengths of all their employees, whatever their background may be. As for best business related book, that would be Built to Last by Jim Collins and Jerry Porras. I read the book in middle school because I was fascinated by corporate America and how CEOs build successful companies. The book emphasizes the importance of core values – it’s important for your business to stand for something, and for your employees to believe in something.
Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-tse’s Tao Te Ching:
“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”
Sehgal: That says it all. The message is “begin with where you are.” Everyone is looking to get ahead, but you get ahead by doing well at the things that are immediately in front of you. In this case, start with the people around you, learn from them, and invest in them.
Morris: From Michael Porter: “The essence of strategy is choosing what [begin italics] not [end italics] to do.”
Sehgal: As jazz trumpeter Miles Davis observed, it’s not the notes, but the spaces between the notes that matter. Knowing what not to play as well as the timing of what to play give definition to your performance.
Morris: From Richard Dawkins: “Yesterday’s dangerous idea is today’s orthodoxy and tomorrow’s cliché.”
Sehgal: That reminds me of Max Planck’s “Science advances one funeral at a time.”
Morris: From Isaac Asimov: “The most exciting phrase to hear in science, the one that heralds the most discoveries, is not “Eureka!” (I found it!) but ‘That’s odd….’”
Sehgal: Necessity is the mother of invention.
Morris: From Thomas Edison: “Vision without execution is hallucination.”
Sehgal: You need a dream and a deadline.
Morris: Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”
Sehgal: Pick your battles. Choose wisely.
Morris: In one of Tom Davenport’s recent books, Judgment Calls, he and co-author Brooke Manville offer “an antidote for the Great Man theory of decision making and organizational performance”: organizational judgment. That is, “the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.” What do you think?
Sehgal: Most great companies are run from the bottom up: CEOs who have come up through the ranks understand that it’s important for all employees to feel empowered and for all managers to truly own their P&L. The more a CEO can empower his direct reports and their reports, the more buy-in there will be to the common vision. Over time, these “little” decisions by employees snowball into real and powerful operational performance.
Morris: Here’s a brief excerpt from Paul Schoemaker’s latest book, Brilliant Mistakes: “The key question companies need to address is not ‘Should we make mistakes?’ but rather ‘Which mistakes should we make in order to test our deeply held assumptions?'” Your response?
Sehgal: Look at Google. They are re-organizing their businesses (even renaming it with Alphabet) so they can be bolder and make strategic mistakes and then learn from them. But most companies aren’t Google in that they make incremental changes and don’t go for the moon shot. Schoemaker makes a philosophical point. However, in my experience, executives aren’t going around deliberately planning to fail – or even proactively learning from their mistakes.
Morris: In your opinion, why do so many C-level executives seem to have such a difficult time delegating work to others?
Sehgal: Type A personalities want to get the job done themselves. They don’t trust other people because they think the quality or speed of work will suffer.
Morris: The greatest leaders throughout history (with rare exception) were great storytellers. What do you make of that?
Sehgal: Leaders have to communicate their vision of the world to their followers, and have to do so in a persuasive way. One of the best ways to convince someone is to use a telling example, a story, a narrative. When Steve Jobs announced a new product, he told a story, exzlaining how a product would change the world as we know it. He turned Apple into a story whose challenges and adventures you want to hear about
Morris: Most change initiatives either fail or fall far short of original (perhaps unrealistic) expectations. More often than not, resistance is cultural in nature, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.” Here’s my question: How best to avoid or overcome such resistance?
Sehgal: Persistence. Change doesn’t happen overnight. You have to stay with it. Rosa Parks helped start the Civil Rights movement in earnest in 1955. Then it was nearly a decade until the Civil Rights Act was passed. Dr. King had a vision and remained undeterred. He was persistent.
Morris: In recent years, there has been criticism, sometimes severe criticism of M.B.A. programs, even those offered by the most prestigious business schools. In your opinion, in which area is there the greatest need for immediate improvement? Any suggestions?
Sehgal: I didn’t attend business school, so I don’t have an opinion based on personal experience.
Morris: Looking ahead (let’s say) 3-5 years, what do you think will be the greatest challenge that CEOs will face? Any advice?
Sehgal: Retaining talent, especially among Millennials. Gone is the day where you work at a job for thirty years and retire. Millennials jump around and switch careers. I think it’s important for CEOs to highlight career mobility within a company, so that employees don’t get bored and continue to be stimulated.
Morris: Now please shift your attention to Coined. When and why did you decide to write it?
Sehgal: I started working on Wall Street just months before the credit crisis began, and I couldn’t believe what was happening. People losing their jobs, homes, fortunes. I wanted to know what was going on in people’s brains when they dealt with money, so I launched a four-year quest to research and explore the topic of money and why it has such a profound impact on our lives.
Morris: Were there any head-snapping revelations while writing it? Please explain.
Sehgal: I was intrigued by the extent to which genetics plays a role in our financial decisions. Researchers have found that identical twins who have been separated for long periods of time actually invest in a similar manner. In another study, almost 20 percent of participants’ credit scores were influenced by their genes. Biology really does affect how we spend money.
Morris: To what extent (if any) does the book in final form differ significantly from what you originally envisioned?
Sehgal: I knew I wanted to look at money through a range of different perspectives, from biology to art history. But I wasn’t sure of all the different perspectives. Only through the writing process did I realize that there needed to be a section on religion, for example.
Morris: People were selling or trading long before coins and “notes” were used as currency. Here’s a question I have been wanting to ask you since I read your book for the first time. How do you define “money”? Is the word synonymous with “currency”?
Sehgal: I define money as a “symbol of value” which is a broad definition. I wanted an expansive definition because the book looks at money through a panoramic lens. On a biological level, the brain registers money as something valuable – even a dollar bill which has no intrinsic value, it’s just paper. At the same time, money is a canvas on which we put artistic symbols. The picture of George Washington on the one dollar bill is one of the most widely recognized portraits, a symbol of America throughout the the world.
Morris: You suggest that your book explores “an ancient topic in new ways” while “hearing the different frequencies of money.” Please explain.
Sehgal: I don’t think money can be understood through a lens limited to economics. And most books about money tell you the history of money, the instrument. But money is also an idea, one that we exchange to survive. It’s crucial to see money in various ways, from psychology to anthropology, because it is so influential in all aspects of our lives, across every culture, in all societies.
Morris: What are the most common misconceptions about money? What in fact is true?
Sehgal: That you need it to be happy. But money is really like blood. You need it to live but it isn’t the point of life. In my book, I write about how dissatisfied people are when they only chase money or compare themselves to others who have more. I cite one study that finds that in the U.S., you need about $75,000 per year, well above the median – and after that, you are not materially happier.
Morris: In your opinion, should money be a means, an object (or end), or both? Please explain.
Sehgal: Both. You need enough money in order to acquire basic resources like food, water, and shelter that you need to survive. So in that way, it’s a means. It’s also an object, a piece of art, which represents the society in which it was made. Everywhere I went around the world, I asked collectors to show me coins that best represent their country, and they were proud of these objects that they had collected.
Morris: To what extent is the general view of money in the United States significantly different from any other nation’s? Please explain.
Sehgal: We are privileged that the dollar is the “currency of last resort” and the most important currency in the world. Global commodities are priced in dollars. Central banks in other countries hold great quantities of dollars. The dollar was the safe harbor, the port in the storm during the credit crisis. Actually, people started hoarding one hundred dollar bills during that crisis. This gives policy makers and citizens great confidence in our economic and monetary power. It’s not like that in other countries.
Morris: In your opinion, why are so many people (at least in the United States) illiterate in terms of economics, finance, etc.?
Sehgal: Because we don’t invest in financial literacy in a meaningful way. We should be teaching elementary school children how to balance a checkbook, how to do basic accounting, why it’s important to pay your bills on time.
Morris: In your opinion, how best to reduce (if not eliminate) that illiteracy? If public schools were involved, beginning at which grade level? Please explain.
Sehgal: First, education. Begin the learning process as early as possible, in elementary school. Second, encourage and support entrepreneurism. There are numerous websites that are helping to explain investing to Millennials and women such as Betterment and DailyWorth. Third, policy. I know it’s a priority of the US Treasury to augment financial inclusion and increase financial literacy. We need more government agencies to emphasize that by providing generous support of efforts to increase financial literacy.
Morris: There are dozens of passages throughout your narrative that caught my eye. For those who have not as yet read the book, please suggest what you view as the most important point or key take-away in each of these passages. First, The Currency of Nature (Pages 21-24)
Sehgal: All organisms rely on exchange. They form symbiotic partnerships in order to obtain the energy that they need to survive. Right now, you are in a symbiotic partnership with a plant, part of the carbon cycle. Energy is the currency of nature.
Morris: The Human Connection (24-29)
Sehgal: In essence, money gives us the calories we need to survive. Over time, we became aware that exchange and cooperation increase our chances for survival. Eventually we create tools to facilitate trade. One of these tools is called money.
Morris: Symbolically Thinking (34-37)
Sehgal: Among the earliest signs of humans in the archaeological register are cave drawings from 40,000 years ago. Humans rendered images of animals, and these drawings revealed that our brains had — by then — evolved to think symbolically. Money is a symbol, an abstraction from its primary purpose of providing the calories that we need to survive.
Morris: Let’s Get Rational (42-47)
Sehgal: For the last several decades, there was a prevailing belief among traditional economists that the markets were rational and self-correcting. Alan Greenspan advocated this view. But the 2008 financial crisis showed that this view is incorrect, and Greenspan eventually admitted as much.
Morris: Brain Man: Brian Knutson (55-63)
Sehgal: Dr. Knutson is a neuroeconomist, a brain scientist, who examines financial decisions. He has used brain scans to identify what parts of the brain activate when investment and purchase decisions are made. He is a brilliant man who remains in the vanguard of an interdisciplinary, emerging academic discipline.
Morris: In Brains We Trust (63-65)
Sehgal: All decisions originate in the brain. So if we can better understand what’s happening in the brain when we make investment decisions, maybe one day we’ll be able to make more accurate financial forecasts – for a stock or even the entire market.
Morris: The Gift (75-83)
Sehgal: In some cultures, when you give someone a gift, it’s expected that they will pass it on. This seems like a peculiar practice in the West, but in many other societies, a gift has a spirit. If you try to possess the gift, you remove its spirit as a gift.
Morris: Sinister Bonds (89-92)
Sehgal: People have tried to control other people by trapping them with debt. A loan can become a harmful and dangerous weapon.
Morris: Silver Civilization (103-106)
Sehgal: In Ancient Mesopotamia, silver was the primary rare metal and used as a type of currency.
Morris: A Democracy of Owls (111-117)
Sehgal: In Ancient Greece, drachma coins with images of owls were issued. These owls represented Athena. Also, coins helped to democratize the marketplace, as poor people could trade more easily and didn’t have to rely on literate, sometimes dishonest intermediaries such as brokers.
Morris: Dragon Money (133-139)
Sehgal: Paper money was invented most likely during the Tang Dynasty in China.
Morris:”All About the Benjamins” (144-148)
Sehgal: Benjamin Franklin believed in issuing paper money backed by a financially sound national land bank. He realized that paper money could help the new nation to boost commerce and facilitate trade.
Morris: Getting Softer: The Civil War (148-150)
Sehgal: During the Civil War, President Lincoln suspended convertibility of paper money into specie. It was also during his presidency when greenback was issued to finance the war efforts. Money was becoming less “hard,” reliant on gold or silver to back it.
Morris: Getting Softer: The Great Depression (151-153)
Sehgal: During the Great Depression, President Roosevelt issued an executive order that prohibited people from hoarding gold. The dollar was becoming “softer” in that it was becoming more of a fiat currency, one that is not backed by a physical commodity, one whose value is determined by supply and demand.
Morris: To Invisible and Beyond (160-161)
Sehgal: Money is becoming increasingly plastic and digital.
Morris: The Bear Cause (166-180)
Sehgal: If there is a major disaster, let’s say an asteroid strike, we’ll go back to trading meats and furs. We won’t need an abstraction, a dollar bill, but real tangible goods to survive.
Morris: The Bull Case (180-189)
Sehgal: If the future is one filled with technology and digital innovation, the mobile phone will become the payment device of the future. Almost everyone in the world has a mobile phone.
Morris: No Two Masters (203-213)
Sehgal: The New Testament states that man cannot serve two masters. He must choose one (God) and not the other (money). For what man chooses will reveal his heart.
Morris: A Test of Man 216-220)
Sehgal: In Islam, money is considered a test. How does a man or woman respond when they have money? Do they worship money or God?
Morris: Of all the great leaders throughout history, with which one would you most want to share an evening of conversation if it were possible? Why?
Sehgal: Genghis Khan. He was a religious moderate who allowed many different religious faiths to practice in his lands. And he created the Mongol empire, one of the largest in the world. I would like to better understand his military campaigns and discuss with him why he used certain maneuvers when engaged in battle.
Morris: Let’s say that a CEO has read and then (hopefully) re-read Coined and is now determined to establish or strengthen a workplace culture within which personal growth and professional development are most likely to thrive. In your opinion, where to begin?
Sehgal: It is important to understand that the most important currency is social debt. Doing things for others. In order to get, you have to give. Creating a mentorship program where senior leaders “give” their time may be an effective way of building social currency in the workforce.
Morris: For more than 25 years, it has been my great pleasure as well as privilege to work closely with the owner/CEOs of hundreds of small companies, those with $20-million or less in annual sales. In your opinion, of all the material you provide in Coined, which do you think will be of greatest value to leaders in small companies? Please explain.
Sehgal: Entrepreneurs should learn how to “talk” about money with investors. People with money face a capital allocation and preservation problem. Inflation eats away at the value of their cash. So they are looking for places to invest, yet only 10 percent of those eligible to make angel investments actually do so. An entrepreneur looking to raise capital should convince prospective angel investors that it’s important to take some risks, like investing in a startup or small company.
Morris: Which question had you hoped to be asked during this interview – but weren’t – and what is your response to it?
Sehgal: You covered it all!
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Kabir cordially invites you to check out the resources at these websites: