Does It Surprise You That S&P’s New President Happens to be a Claremont McKenna Alumnus?

A Q&A with Douglas Peterson

At a certain point, it gets tough to jam an extremely successful person’s interests into a tiny space of web estate. But let’s give it a go: Doug Peterson ’80 P’14 P’15 loves jazz music, has lived and worked in five different countries for Citi, likes books about management and leadership (and the occasional novel), has traveled the world to visit archaeological sites, has two sonsDouglas and Felipeenrolled at CMC (as noted by the two P’s trailing his name above), and during the time his boys were growing up in sports, made sure to squeeze in room for volunteering, whether as coach, lineman, or simply, team snack provider. He also loves Claremont McKenna. Last winter, while still COO for Citbank North America, he hosted students on the College’s annual New York City Networking Trip, sponsored by CMC’s Financial Economics Institute. He first gave them a broad overview of Citi, then filled in the crucial career steps that had gotten him there.

Even with tremendous obligations assigned to him as Standard & Poor’s Ratings Services new presidenta role he assumed on Sept. 12, 2011he flew in for CMC’s Parents Orientation in late August to unpack a second child at his alma mater. He did this, in fact, as headlines were breaking nationally about his new S&P leadership roleand weeks within the shadow of S&P’s decision to downgrade the U.S.’s AAA credit rating to AA+.

While on campus, he graciously sat for this Q&A.

CMC: You have a track record for taking on some of Citi’s most difficult problems. Do you think that played a role in S&P hiring you?

Peterson: One of my career philosophies this was true, even before I joined Citiis to always look for opportunities where I can learn the most. And usually I can learn the most when I go outside my comfort zone, or there’s a problem that I have to get in there and roll up my sleeves and work hard and learn a lot to be successful. Because of that philosophy, I’ve taken on some very interesting assignments at Citi that have given me a very broad scope of different roles, whether it’s operating jobs, overseas in Latin America, overseas in Japan. And those experiences, gave me skills and tools that were attractive, from my point of view for the S&P job, and probably from S&P’s standpoint for me.

CMC: Is it your hope that by serving on the advisory board for the Kravis Leadership Institute you are helping develop the next fixers’ of tomorrow?

Peterson: When I went to Costa Rica in 1991 as a country manager, it was my first job as a manager. Up until then I’d always been an individual contributor as a banker. And when I went into that role, I started learning about, and getting interested in, management and leadershipboth of those topics. And so over the years, and as I’ve gone through different roles and in particular, when I got to Uruguay, I became very interested in leadership and have over the years developed more and more philosophies and experiences around leadership. So when I learned about the Kravis Leadership Institute, I felt it would be a very rewarding organization to be affiliated with because of my interest in leadership.

CMC: Some say the United States reached its apex in its global economic position several years ago. What do you think: Have we slid at all, relative to the rest of the world?

Peterson: I think there is a big shift in the type of country model and comparative advantages that the United States brings to the globe in a time when markets like China, the Middle East and Brazil are growing and emerging. When I was a kid, the U.S. market was defined by big oil and big auto and, if you think about it structurally, the United States was an economy where we were producing our own oil, building our own cars, and we were exporting cars. It was more of an economy based on industry, and exports were a big part of that. But more importantly, there was a very large, growing, young population that was consuming, and consuming things we built ourselves. Our economy has shifted to a knowledge economy, where we make less and less of what we consume and what we use. We import oil. And if you look at our most competitive companies, besides Boeing and Caterpillar and a few other really critical large manufacturers, most of our competitive advantages these days are in services. A few miles from here you have Hollywood. That’s still a huge industry that’s dominant in the United States, as is the financial services industry, the consulting industry, and the software industry. If you go even further up the road and you get to Silicon Valley and you go the corridor between San Jose and Washington State. There you have Apple and Google and Microsoft. These are companies that are very competitive in the United States. Right here on this campus, the education industry is still massively competitive, and the most attractive and competitive industry compared to others around the world.

CMC: What are the top three holdings in your stock portfolio, other than Citi?

Peterson: I don’t buy individual stocks. I’ve worked in positions where my ability to purchase and sell shares is restricted. Everything has to be pre-cleared, which makes it very difficult when you’re working as much as I do to trade stocks. But more importantly than that, over the years I have come to believe that it’s better to think about long-term investing strategies and asset allocation rather than individual stocks.

CMC: Your sons Douglas and Felipe are current CMCers. They could have gone to any College. So why did they choose CMC?

Peterson: Both of my sons were looking for a college experience that would continue their globalization. They felt that Southern California, generally, had very close ties with Asia and Latin America and that the school has become more international. That was one of the things that was important for them, having grown up overseas. They also wanted to be in a school that was small, diverse, and very engaging for the students and the professors.

CMC: As you reflect on your CMC education in the late ’70s, how has it played a role in your success today?

Peterson: I thought a lot about these things when I was going through the process of making a decision to take a new role outside of Citi after 26 years. But reflecting back on CMC, it’s clear to me that the most important thing I learned at CMC was critical thinking — learning how to learn, learning how to think, learning how to investigate, and believe it or not, learning how to write. That was especially important, and those are foundational skills that I’ve continued to use throughout my entire career.

CMC: If your 2011, current self could talk to 1980 CMC self, what would you say?

Peterson: In the last 30 years or so, there’s been an explosion of technology and communications, which is completely different than when I was at CMC. When I was on campus there was no Internet, no cell phones, no immediate gratification and immediate communication. There were just four or five channels on TV. And then secondly, I would say that despite all that, don’t forget about having personal relationships.

CMC: The College prides itself on developing leaders. And when you step back and look at who has come out the school, we have people like Father Patrick Conroy (the new Chaplain of the House of Representatives), Robert Day, Henry Kravis, David Dreier. And now you, the new S&P president. What do you think it is about this little liberal arts college in Claremont, Calif., that produces such extraordinary leaders on a global scale?

Peterson: I think that all universities and colleges provide an environment where you get to meet a lot of new people. You’re thrown into a situation where you’re immediately very open to new ideas and new experiences. But I think CMC provides a very open and engaging classroom environment with small classes and really committed and dedicated professors who push you hard and make sure you work hard and that you learn. So it’s a combination of the American university environment where you live on a campus, which is an advantage for our education system, generally. But the environment of The Claremont Colleges’ multiple campusesgiving you access to lots of different colleges in the group is great. Most importantly it’s the quality and the passion of the professors that makes a big difference.

CMC: So, OK, we have to ask: What rating would S&P give CMC?

Peterson: As a college, CMC would be a ‘AAA’ in my book.

Much more about Peterson can be discovered in his videotaped interview as a guest of the President’s Leaders Forum last October http://vimeo.com/channels/plf#18930392