In today’s special episode, Randal K. Quarles joins us to share some golden nuggets on leadership, teamwork, and task prioritization and showcase irrefutable evidence that you are never too old to become your best. Randal is a seasoned leader with broad experience leading financial services in the United States, who has been involved in a number of the largest financial mergers ever completed, was a partner of the Carlyle Group, and held senior financial policy positions in four different presidential administrations over the last 35 years. In 2014, Randal brought together the group that founded The Cynosure Group, where he is currently an Executive Chairman.
Steve Shallenberger: Welcome to all of our “Becoming Your Best” listeners, wherever you may be in the world today. This is Steve Shallenberger, your host, and I am so delighted with the guests that we have today. This is a special episode of The Becoming Your Best podcast series. It’s episode number 400. Someone was telling me the other day, a professional podcast business, “Wel, okay, my goodness, if this is number 400, you are in the upper 5% of all podcasts anywhere.” And I was a little surprised at that but delighted. So, I’m glad that we have a little staying power.
Steve Shallenberger: Let me tell you about our guest today. He is the chairman and founder of The Cynosure Group, an alternative asset and wealth advisory firm. And from October 2017 through October 2021, Mr. Quarles was Vice Chairman of the Federal Reserve, serving as the system’s first vice chairman for supervision, charged with ensuring the stability of the financial sector. From December 2018 until December 2021, he also served as the Chairman of the Financial Stability Board; it’s a global body established after the Great Financial Crisis to coordinate international efforts to ensure financial stability. He was a key architect of the Fed’s crisis response in March of 2020, credited with maintaining the function of the United States and global financial systems, as described in the book “Limitless” and “Trillion Dollar Triage.” Welcome, our guest today, Randal K. Quarles.
Randal Quarles: Thank you, Steve. It’s good to be here.
Steve Shallenberger: I’m so delighted to have him. And before we get going, I’ll just tell you a little bit more, and then we’re going to jump right into this. It’s going to go fast. We’re always so honored to have you with us, our guests. We know that you have the spirit of working on being the very best that you can be, and the things that we’re going to talk about, I promise, you’re going to get some golden nuggets today that will be helpful as you desire to do that. As you’re working on being a leader and blessing other people’s lives and making the world a better place. Earlier in his career, Randal was a long-time partner at The Carlyle Group, a leading global private equity firm. And before that, a partner at the international law firm of Davis Polk & Wardwell, where he was a co-head of their financial services practice. Randal has been a close advisor to every Republican Treasury Secretary for the last 35 years, including as Undersecretary of the Treasury in the Bush ‘43 administration. He’s represented the United States in meetings of the Group of Seven, Group of 20, and Financial Stability Forum, and was also the US Executive Director of the IMF.
Steve Shallenberger: So, a little disclosure here: Randal and I are cousins. So, I have been looking forward to this as much as any podcast that I’ve done. So, I know a lot about Randal, and we have so many memories together. I remember when he was three, and I was about nine—somewhere in that range—I was watching Superman on television, and Randal was reading newspapers by the fireplace. So, you know, he’s got all this knowledge; he really is spectacular, and one of the most special people I know. So, Randal, to jump into this today, please tell us a bit about your background, including any turning points in your life that have had a significant impact on you.
Randal Quarles: Well, I grew up in a little town in northern Utah. And I would say, I made what was, in that little town, the unusual decision to go to college in New York City. I went to Columbia in the mid-1970s. And that was a major turning point, I think, that opened up my eyes to new possibilities that I might not have thought of, had I remained in Utah. Then, I graduated college, I went to law school in New Haven, Connecticut, and went back to work in New York. As you said, I was an associate, I was a lawyer, at a firm called Davis Polk & Wardwell, and on my way to becoming a partner. And just the year that I would have become a partner, the US Treasury was seeking to put together a team to respond to the savings and loan crisis. And I left the firm in order to work on that team, which was viewed as a very unusual thing to do on the cusp of partnership. And that, too, I think, was a turning point because, again, that opened up my mind to new possibilities. You can get very focused, particularly in an intense environment like one of the big New York law firms, on the objective ahead of you. And by taking myself off that track and doing something different, that also opened up a whole set of other possibilities. And then, as you said, I left the Treasury, became a partner of The Carlyle Group in private equity, and then started my own firm, came back to Utah.
Steve Shallenberger: Okay, well, that’s good. Well, we’re going to talk a little bit more about that. Thanks for that background. Randal, what are some of your key lessons learned—professional lessons or personal if you’d like—that have helped you and the organizations that you have led or been part of, in leading them to be successful? And maybe an experience or two of how you learned those lessons.
Randal Quarles: So, I would say, probably two: one related to personal development, and one related to organizational success. On the personal development side, I sometimes phrase it as “You have to be willing to let go of the brass ring.” I described a career, which is very common for lawyers in New York, particularly, or investment bankers—professionals in intense organizations—to become absolutely absorbed in the quite absorbing challenges of those institutions and to close yourself off from other possibilities. When I left as an associate to go into the Bush ‘41 Treasury for a couple of years, and then I came back to the firm, but that was viewed as eccentric. “You’re about to become a partner; why would you do that?” The willingness to do that opened up a lot of possibilities. Eight years later, in the Bush ‘43 Treasury, I was a partner by then. They asked me to come back to the Treasury in more senior positions. No one from my firm had ever left to go to the government in 40 years; it had once been a common thing to do, but it was just, “Why would you do that? No one does that.” My willingness to do that opened up a lot of possibilities. I ended up not going back to the firm but going to one of the big private equity firms, Carlyle. Again, my willingness to let go of the brass ring that was in front of me opened up new possibilities. I think the willingness to look beyond—even the important and absorbing responsibilities you have currently—and see what else might be out there is very important. So, that’s on the personal development side.
Randal Quarles: On the organizational success side, there’s a saying—maybe a bit of a cliché—but I’ve found it to be very important, and I’ve used it as a guide throughout my whole career. I used to think it was a saying from the Ute Indians of the White Mountain Reservation, but some say it’s an African saying; there’s a Senator who says that he made it up. I think it may actually have come from a temporary hire at the Hallmark Greeting Card Company in 1957. The saying is, “Faster alone, but farther together.” In organizations, that’s definitely true. There are different types of effective people: there are some who put together a staff to execute their will, and there are others who put together a team to achieve an objective. I think it’s the latter group that ultimately goes farther. The first group may go faster, unquestionably, but the latter goes farther. An example of this was in the Bush ‘41 Treasury. The Treasury Secretary in those days—35-40 years ago—was a man named Nicholas Brady. He had been the head of Dillon & Read, one of the New York investment banks, and was a very close friend of President George H.W. Bush. His approach to his job was not, “I’ve got some ideas that I need a staff to execute.” Instead, he spent the summer before he was actually appointed—he knew he was going to be appointed—interviewing everyone he could to find out what appeared to be the main issues that the Treasury ought to address. He came up with three: the budget deal that became famous in 1989, addressing the Third World debt crisis of the time, and responding to the savings and loan crisis with reformed bank regulation. So, he said those were the three things.
Randal Quarles: Then, instead of saying, “And here’s how I, Nick Brady, am going to address them,” he put together teams for each of those subjects to develop an answer. He didn’t say, “Now I’ll figure out the answer”; he said, “I will get the best people together to develop answers to these three things.” When you look back in history, the Brady Treasury was probably the most successful Treasury in any administration over the course of my life. And there have been some very successful Treasury Secretaries—very smart, very able—but that approach of, “I’m not going to do this alone; I’m going to put together teams, and we’re going to do this together to achieve the objectives,” is, I think, for any organization, ultimately the most successful.
Steve Shallenberger: Thank you for those insights. Those are terrific insights. If you had the chance to sit down with someone who was just joining your team, what would be one or two things that you would say to them about what it means to be a great team member?
Randal Quarles: So, I would say a couple of things. First, you have to be focused on the team, as opposed to only what you’re going to get out of the project, the objective, or the association. You need to be more focused on, “What can I contribute?” as opposed to, “What will I obtain?” I think that other important element is that work can be a joy. Contributing is a lot of hard work, but you need to be able to find the joy in very intently focusing on developing areas of expertise that will allow you to contribute at an even higher level in an organization. Work hard at improving what you can best add to the team. And I think those too often those are not focused on by folks in organizations.
Steve Shallenberger: I love that advice and that counsel. Now, this next question is one I’ve been itching to ask you. You have seen from the inside how monetary policy is made. And it has such a big impact, not only on every single one of us as citizens of the United States of America, but on the entire world. So, what happens inside the Federal Reserve? And should we have confidence that the Fed really understands how to address the monetary and financial problems we’re facing?
Randal Quarles: The Fed is a complex and sometimes obscure organization. I thought I understood it very well. A lot of my career, leading up to my appointment at the Fed, had involved close interaction with the Fed—both in the private sector and in the public sector, my stints at the Treasury, my investing practice was often in financial institutions, my law practice was representing financial institutions. I thought I knew the place. And after about 15 minutes inside, you realize that no one knows this place if you aren’t inside of it really. But it was also very gratifying and encouraging, as a citizen, to see how the decision-making process and the analysis of monetary policy went within the Federal Reserve. It is a joint decision. The monetary policy moves are decided by a committee of 19 people, really; 12 of them have a vote at any particular time. Again, it’s a Rube Goldberg, very complex arrangement. There are 12 separate Federal Reserve banks around the country and each of them has a president. There are seven Governors of the overall system that sit in Washington. Those 19 people come together every six weeks and consider monetary policy. Five of the 12 Reserve Bank presidents have a vote at any one time. So, it gets all very complicated, but everybody discusses the issues in front of them. And the decision-making meeting, every one of those six weeks, kind of proceeds in a regular way. There’s a discussion of everyone; everybody goes around the table and everyone discusses the economy. And you go around the table and everyone discusses financial stability. Then you go around the table and everyone discusses what monetary policy ought to be, in light of those previous discussions. It takes a couple of days to do all of that.
Randal Quarles: As I say, you’d be really encouraged and gratified as a citizen to see how really non-political those discussions are. They’re smart people bringing together their input from all around the country; that’s why the 12 Reserve Bank presidents participate. And the governors of the board in Washington have to be selected—they can’t come from all of one place or one background; the law requires that they also have many different backgrounds. So, you bring all of that input together to try to come up with the best decisions. And just as an example—again, of what I think was quite encouraging—probably my closest—I don’t know if you’d say “ally,” but we thought most similarly about monetary policy; we would generally support each other in positions that we were taking—was a fellow who was the president of the Reserve Bank of Atlanta named Raphael Bostic. Now, on paper, you would have said that Raphael and I had absolutely nothing in common. He was an official in the Obama administration; he was an assistant secretary of HUD; as what had been before. He was a very skilled economist. He was a Stanford PhD economist, but a very liberal politics. Maybe the only overlap you would have imagined was that his husband came from a little town in central Utah. But on paper, you would have said, “Here is this conservative, Mormon, Republican, and here is this very liberal, ex-Obama official; these people couldn’t have anything in common.” And we were side-by-side in the discussions about monetary policy all the time. And I was pleased when, in the remarks when I was leaving the Fed, a section of his farewell quoted Freud’s “Interpretation of Dreams,” where he says, “In the dream, opposites become one; the opposites are erased.” And that exemplified our discussion over the time that we were at the Fed together. It’s a very good process that produces the best decisions possible for monetary policy.
Steve Shallenberger: Thank you for that background and inside view. About six years ago, we were having a Corals reunion. My mom was a Corals, and she and Randal’s dad are brother and sister. One of the things we do in our reunions is we have a 5K walk—or run for some. So, we’re out walking, talking about the Federal Reserve, and I realize these are really some of the smartest people in the room. But they also vet and have give-and-take, and hear other’s opinions; they’re open. So, when you’re talking about raising interest rates or lowering them, they get it, and it is encouraging. That was fun, Randal. I’m always blown away by how fast everything goes in these interviews.
Randal Quarles: Randal, what tips might you have? Because you’ve had a busy life: you have a wonderful family, beautiful wife, beautiful children. What are your tips—and extended family as well—and Randal, you’re so faithful in tending to our family at large. What tips do you have on maintaining good health and balance in life, especially when there’s so much going on?
Randal Quarles: Well, I’d say two — both of them are probably obvious, but they’re hard to do. And I’m not a paragon of doing them either. One is, you really do have to focus and prioritize. A woman whom I’ve long admired, Carla Hills—she was a cabinet secretary in the Ford administration, I think, and a mother of a good friend of my wife’s—she, as a woman in the ’70s, was a fairly high-powered executive and a cabinet secretary. Yet, she was still a mother, and she was a very good mother to Laura. She prioritized: “Look, I need to do these things,” and she would schedule them. Meeting with the President at the White House: 11 to 12. Attend the soccer game: 12 to 1. That has to be on there. So, you have to prioritize. Part of prioritization is being rigorous about saying ‘no’ to things and being pretty rigorous about scheduling to get a broad range of things done. I have a practice where I schedule everything that I’m going to do. So, it’s not just a to-do list; I have a to-do list, and then I say, “Well, this is what I can get done in a day, and these are the highest-priority things.” And then, for that next day, I begin in the morning and say, “So, this will take this long, this will take this long,” and everything is on the calendar, as opposed to just trying to get random things done and getting interrupted by a phone call. People have grown used, over the years, to the fact that they will rarely be able to call me and get an answer because I’m not doing that right then. But I will return their call promptly.
Steve Shallenberger: Okay, I love it. That’s excellent. Randal, what is your advice on how someone can become their best? It’s something that you’ve tried to do throughout your whole life. I love the fact that you’ve let go of the brass ring—or gold ring, whatever it is—and taken on new opportunities. But you’ve responded to this feeling within you to become the very best that you could be. So, I’m just interested: what advice can you give for people to do that? And then, is one ever too old to become their best?
Randal Quarles: I would go back to what I’ve said before—becoming your best—if you’re focused always on, “What can I contribute?” and “How can I contribute more?” You will, over the course of a career, discover that you are improving your own abilities, probably in the best way. Are you ever too old to become your best? As you mentioned, I’m the chairman of a firm that I started 10 years ago, an investment firm called Cynosure. At the time, I was a partner at The Carlyle Group, one of the absolute leading private equity firms in the country, and I was 56 years old. That is a little… I probably should have realized how unusual that was. Maybe I wouldn’t have done it if I’d really focused on it. But, at the age of 56, to say, “I’m going to start an entirely new firm when I am a partner at one of the great private equity firms”—I don’t know that I’d recommend it to everybody. But it’s been very successful. I’ve been really pleased with having done it, and put together a great group of people that I work with. And I think that’s just an example of, “No, if you’d been analyzing that on paper, you would have said you are too old to start your own brand-new investment firm.” And certainly, during this process, I realized why people start firms when they’re in their 30s and not in their late 50s. But it’s been an absolutely terrific and expanding experience. So, no, I don’t think you’re ever too old. I probably won’t start one again.
Steve Shallenberger: Yeah, that’s what I was going to say. I bet Randal is not done yet. I happened to be in our grandparents’ home in Las Animas, Colorado. I was probably 25, Randal. I don’t know how old I was. Maybe I was a little older, maybe 35. But our grandpa died at about 85 years old. And I was reading some of his handwritten letters. One of them was about 10 or 12 pages, and it ended with this: He said, “I don’t know that I’ve really done any good in the world.” I saw that, and I thought, “Well, we love our grandpa so much. I mean, he is such an inspiration to us. But all you have to do is look at the posterity and know that the good that he’s done will never fully be known, but it’s reached all over the planet.” And Randal is a big part of that. And so, don’t underestimate yourselves, to our wonderful listeners, of your influence and reach. Our time is up today. So, I’d like to just finish with this question: Any final tips that you could give our listeners today, Randal, that you think would be helpful?
Randal Quarles: I guess the final tip I would say is: always be willing to imagine something better, and you’re likely to achieve it.
Steve Shallenberger: I love it. Well, that’s great. Randal, how can people find out about you or Cynosure, or learn more about you?
Randal Quarles: Well, CynosureGroup.com has a background of the firm and all of us. I think if you Google me, there’s a lot of information that you can get.
Steve Shallenberger: Okay, great. Well, thank you, Randal Quarles, for being part of this show today. Thank you for a lifetime of blessing others for good, including me. I’m grateful for you.
Randal Quarles: Thanks, Steve. Thanks for having me on.
Steve Shallenberger: Yeah, it’s been a delight. And to all of our listeners, wherever you may be today, wishing you the very best; you’re such an inspiration. This is Steve Shallenberger, signing off from Becoming Your Best — the podcast series.
CEO, Executive, Corporate Trainer, and Community Leader
Executive Chairman at The Cynosure Group