SIEPR Summit engages business leaders, scholars and policymakers

Duggan and Porat
Mark Duggan and Ruth Porat (Photo: Steve Castillo)

The 2017 Stanford Institute for Economic Policy Research Economic Summit on March 10 drew a mix of insights from experts in academia, industry and policy, who took participants from the dark days of Wall Street and the Golden Age of Hollywood to the uncertain future of the world’s geopolitical shifts.

The annual event, in its 14th year, featured two keynotes — one from former National Security Advisor STEPHEN HADLEY and another from former Treasury Secretary LAWRENCE SUMMERS, as well as a talk between SIEPR Director MARK DUGGAN and Stanford trustee and alumna and Alphabet CFO RUTH PORAT.

Porat opened the summit by discussing the strengths of Silicon Valley and lessons learned from Wall Street.

Google, she noted, is in its 20s. While its youthful exuberance — as reflected in the company’s “moonshot” divisions or Area 120 incubator projects — hasn’t waned, its massive growth during the past two decades means there’s more work cut out for the giant of Silicon Valley than ever before.

“Market cap, revenues or the number of employees is not necessarily a metric of maturity. It’s what questions or problems we’re trying to solve,” said Porat, chief financial officer of Google’s parent company.

Google, for instance, is only scratching the surface of enterprise businesses; driverless cars are still at an open stage; and there’s the challenge of providing universally accessible information, she said. Google is also always looking to take its products to the next level — whether by enhancing viewing recommendations for YouTube users or improving voice-based search.

Porat joined Alphabet in 2015 and led Google’s restructuring after serving nearly 20 years at Morgan Stanley, including five as its CFO and 10 as its global lead of various banking and investment divisions.

Given her former front-row seat on Wall Street, Duggan asked Porat to recall the 2008 financial crisis and defining moments leading to the stock market crash that came with it.

“It was an absolutely terrifying time. We were all acutely aware we were on the brink of something that was so destructive,” she said.

Yet, “we never could see it coming with the speed of the unraveling,” she continued. “Literally, we could feel the … markets choking.”

What lessons were learned?

Know your source of vulnerability, she said. Build systems, controls and risk metrics for differentiated strategies well ahead of time. Have the will and means. Provide leadership. And most important, set a culture.

“No rules and regulations can govern behavior the way culture can,” Porat said.

And, she noted, the lessons are as relevant for Wall Street as they are in the tech universe.

The financial sector could learn a thing from Google, too, she added, referring to how transparency is practiced at the Silicon Valley-based firm during weekly all-staff meetings. Ideas and products are discussed, and employees can question company co-founders and Stanford alumni LARRY PAGE and SERGEY BRIN, who always show up.

“It’s one of the most powerful tools” at Google, she said.

She said that stands in contrast to the financial world, where “there were areas within banks that knew there were risk positions we were taking on that were crazy, but there was no voice. Things got trapped.”

View the video for more of Porat’s perspectives, and to see how she responded to audience questions about controversial changes brewing under the new White House administration.

Visit the SIEPER web pages for more.