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00:00This is my kitchen table and also my filing system. However, much of the past three decades I've been an investor. The highest quality of mankind, I've often thought, is private equity. And then I started interviewing on my watch here, interviews those I know how to do. I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said 250. I said, fine, I didn't negotiate with him. I did no due diligence. I have something I'd like to sell and how they stay there. You don't feel inadequate now because being only the second wealthiest man in the world, is that right? One of the best known business families, the United States, is the Pritzker family from Chicago. One of the stars of that family is Penny Pritzker, who not only built her own venture capital and real estate business, but also served as secretary of commerce under Barack Obama. I recently sat down with her in Chicago to talk about her extraordinary career and what she hopes to accomplish as a role model for business leaders throughout the United States, particularly women. And if you are a driven person, I think it's fair to say. But very often you see people come from wealthy families as your family is, are not quite as driven as you are. Where did you get the drive to work so hard and never kind of let up at all? You seem to be one of most driven people I've ever met. Coming from you, that's a compliment. Thank you. You know, I grew up in a family where I was taught by my parents to whom much is given, much is expected. And I saw them really engage in building a business. I mean, my mom and dad were really partners with one another. My dad was the CEO building a hotel company. And my mom was really his right hand. She was in charge of every aesthetic decision and they were really host and hostess together is a perfect business for them. And I saw them find joy and purpose in being involved in building. And I was really affected by that. And they weren't just building a business. They were also part of a new community. They had moved out to the West Coast. They were building in there in our local community. And so that motivated me. That inspired me, that sense of having things where you're making a difference and creating opportunity. Your family is one of the wealthiest families in the United States. Currently, the Pritzker family and you have your grandfather had three sons. I understand that. One is Jay Pritzker, who was a very legendary dealmaker. One was Bob, who was a very accomplished businessman and oversaw a lot of large businesses that the family owned. And then your father was the youngest and he helped the run and built a Hyatt hotels. So can you describe what happened? Your father died tragically when he was 39 and you were just 13. So what is it like? You're in a wealthy family and you presumably have a lot of advantages, but then your father dies. When you're 13, you have two younger brothers. What was that like and how did your father die so, so suddenly? My dad died of a massive heart attack playing tennis. And it was a massive blow to our family. You know, imagine the first 13 years of my life. I lived in a family that was building a business. My mom and dad were very involved. My mother was as active in the business as my father, even though she wasn't paid. And my father dies and all of that goes away. I mean, our dinner table conversations had been about business. Our travel had been about building the company. It had really been a huge part of our life. And more importantly, though, my father was this warm, fun, funny individual and just, you know, I was so close to him. And, you know, I have enormous empathy for children who lose their parents. It leaves a massive hole in your heart and your life is instantly changed. So when you were younger, all the story is that your father would take you on visits to hotels and you would be the person that would inspect the ladies rooms. Yes. Is that true? Totally true. We would go. We are. The business began as this series of exterior corridor motels up and down the West Coast. And we would on Saturday mornings, we would go to our motel and he would have me go into the ladies room to make sure it was clean. And he'd go in the men's room and then we'd walk the property. And we talked to the general manager and we talked to the bellman. And you'll back then there weren't big computers until, of course, we got the big IBM computer, which probably took up the entire space of this room. And it was, as I said, it was really a family endeavor. How in your family, the larger Pritzker family? There were many business leaders, but most of them were men, if not all of them. As a young girl, you said to your grandfather, as I recall, how come I can't be in the business world? What are your grandfather's say and why were you so attracted to business as opposed to other things? When I was 16 years old, it was my grandfather's 18th birthday and my mother said, You give your grandfather anything you want for his birthday. And I wrote him a letter. What did you give your grandfather, who seemed to have everything from where I stood and my letter was to your grandpa. You know, you are always talking the boys in the family about business. Why don't you teach me more about business? And I'll never forget the night of his 18th birthday party. He grabs me and takes me out into the hallway and he had my letter in his pocket. It was on green stationery. I'll never forget that. He pulls a letter out. You says. Penny, I was born in 89. 6 How am I supposed to know girls are interested in business and he said. But if you are come spend several weeks this summer with me and I'll teach you accounting. You have to remember my grandfather taught Arthur Andersen accounting. My grandfather believed that accounting was the foundation of all business. And so this was his way of saying, okay, I'm going to help you. So ten years after your father died of sudden heart attack, your mother died tragically as well. So at the age of twenty three, you have two younger brothers and no parents. So your job was to help raise your younger brothers? Is that how you did it? You know, we banded together my after my dad died. My mom wasn't very well. And so it was a tumultuous time for us. And the three of us tried as best as we could as young people to take care of each other. We were teenagers. And so it was it was a complex time for all of us. But we. We made it through and and try to carry forward, you know, the values and the principles that our parents taught us at a young age. Did your brother say to you at the time, I'm going to become governor of Illinois at some point that you say that when he was a little boy? You know, my brother, my younger brother has always wanted to be in politics, and he's a natural politician. He's extremely friendly. He's very bright and very capable. And he cares deeply about people, his enormous empathy. So I'm so proud of him that he's become governor of Illinois. And I think he's doing a heck of a job. She going to run for president someday? I have no idea. But, you know, I'm I'm just really thrilled with the job he's doing today. OK, so your family business is growing. And Jay Pritzker, your uncle, is considered one of the greatest dealmakers of the 20th century. And he built incredibly big business empire when he passed away. It turned out that he said he wanted three people to kind of run the family business. You're your cousin, Tom Pritzker. Your other cousin, Nick. And then you. There were three of you. Were you surprised that that's what he wanted to do? I was flattered because I was much younger, at least 10 years younger than my cousin Tom and more younger than my cousin Nick. But my uncle Jay and I had always had a very special relationship. He you know, frankly, my early career was very much about being an entrepreneur and starting new businesses. And I think he really admired my that entrepreneurial nature as well as my hard work. I think he was intrigued by me as a woman. I mean, he had not grown up with women executives. In fact, that when I showed up at the office for the very first time, I was the first woman who wasn't basically an assistant in the office anywhere. And so I think he he and I developed a lot of mutual respect. He was a mentor to me. And so I you know, we we ultimately that's not the direction that we ended up going as a family. But I was really I felt very flattered by his thing, that gesture. So ultimately, the three of you are running this large family business, which is one of the larger family owned businesses, the United States. And at one point, a cousin or several cousins said, we don't think that's fair. We just want to break up the entire empire. Was that devastating to you and the two cousins who were helping you run the business or. And why did you decide? Let's just get out of this and we'll break up everything and everybody will get their share. Was that a hard decision to make? You know, it was a complicated decision, but frankly, we made it relatively quickly because fundamentally, people don't want to be partners in business. They shouldn't be partners in business. The complex part was it was like a big spaghetti bowl in the middle of the table, all intertwined, very complicated. And so to take spaghetti out of the bowl and put spaghetti on everybody's plate, it took us almost a decade to do it. And we to build at the same time, we were dividing things up. You couldn't be static. You know, if you're static in business, you die. Right. And so we had to both build and divide. And so we took companies public. We sold businesses. We merged. We did. You know, it was it we it was like getting mice an additional page in business that 10 year period. So when you're a friend of somebody becomes president, you call him all the time, baroque, baroque, baroque for many years when you're secretary of commerce and he is the president. We stopped calling him Barack. He was my boss. And in fact, we talked about it when he interviewed me for the job. He really asked me point blank whether I could accept the idea. And I said, Mr. President, of course I can. So let me ask you about being secretary of commerce. Yes, your your very successful business person in Chicago, very active in civic events and so forth, and all of a sudden somebody you knew, Barack Obama becomes president, ISE states. And in a second term, you became secretary commerce. So why did you want to uproot yourself, move to Washington? Well, for the second part of his administration. And did you enjoy being secretary of commerce? I love being secretary of commerce. It was an honor of a lifetime to serve our country and to serve in his administration. You know, Barack Obama and I have a relatively long history. I met him when my kids were 5 and 7 years old and their basketball coach at the Lincoln Belmont. Why was Michelle Robinson's brother, Craig Robinson? And I met Barack and Michelle when he was a state senator. I think she was working at the University of Chicago. And so I had known them for a long time. I knew what terrific individuals they were. And when Barack decided he was going to run for the presidency, he contacted me in 2006 and said, would you help me? Would you become my national finance chair? Would you raise the money for me to run for president? And I thought this was a crazy idea. I'd never raised money on a national level for a presidential campaign. I had no idea how you won, did that. He said, no, no, I want you to do this role. And I did. And it was I but I really almost said no. And what happened was I was sitting talking to my husband after the evening that Barack had asked me. And he said to me, this is destiny knocking on the door of our nation. And you've got to find a way to help. And so that led me to get involved in Barack's campaign. I was the 11th person in the campaign. And over the ensuing two years, we built the equivalent of a Fortune 500 company. We went from eleven people to three thousand people that we were paying and thousands of volunteers. We raised the most amount of money ever for a presidential campaign. It was an extraordinary experience. I didn't serve in the first term, but when the president called me and asked me if I would help him, he really felt that his relationship with the business community was challenged, that he really needed a. You know, chief commercial officer for the United States. And he wanted help. You know, that's a call that everyone hopes that they get. So when you're a friend of somebody becomes president, you call him all the time, baroque, baroque, baroque for many years. When you're secretary of commerce and he is the president, it's a different kind of relationship. Did it make it more difficult for you to socialize with them? Or I assume you stopped calling a baroque, but what was the relationship like when you were secretary commerce and he was president? He was my boss. And in fact, we talked about it when he interviewed me for the job. He said he really asked me point blank and whether I could accept the idea. He said, look, you've been a CEO, you've made decisions. You know what running an organization is like. He said, can you accept the fact that I listened to all your arguments? But at the end of the day, I'm the decision maker. And I said, Mr. President, of course I can. And what I thought to myself is, Mr. President, you've never worked in a family business. It's a lot like that. So you were confirmed 97 to 1? Yes. There aren't that many people these days confirmed that way. So were you surprised that the confirmation took not that long compared to what some people might have expected? And do you think Washington is more or less broken these days because they're Democrats? Republicans can't really agree to almost anything. You know, one of the nice parts of commerce, this is bipartisan. And I worked really hard during the process of confirmation to meet people across the aisle and even folks who like Ted Cruz, who would have very little in common with Barack Obama. You know, he and I saw eye to eye on what, you know, the Commerce Department could do, you know, for the state of Texas. And so I really made it my business to say, I'm going to I will work for everyone in commerce in Congress, regardless of what party. And I answered the phone and tried to help them solve problems regardless of who called me. You were secretary of commerce for almost four years. What are you most proud of having achieved? You know, we did a number of things that I'm really proud of. We laid 100000 miles of broadband. We revamped the Patent and Trademark Office. We worked with Ukraine to help them. They really wanted to turn from east to west and to attack and address their corruption. We you know, one of the things that I did was, as it relates to it became really obvious to me that the semiconductors, we were going to have a problem in the United States with a shortage of semiconductors also that we were going to really run into a national security challenge. And because we were designing our semiconductors, but we weren't producing them. And so I galvanized the department to write a report to the administration and to the federal government about this. And that actually turned out to be the foundation of what became the Chips and Science Act. Avril Haines, who is head of DNI and Ben Rhodes and others who were involved in the transition to the Biden administration, asked me about a number of things for advice. And I said, you know, you've got to focus on the semiconductor challenge that we face. And so we did a whole kinds of things that have had a huge amount of impact, you know, with such a diverse department. You get to be involved in a lot of different things. So you now have PSP partners and you're running, making investments and among other things, you're you're building real estate companies and you're doing things with other women. Some cases you're both a company and real estate with another woman is important to you to have women in business. Are you trying to be a role model? And have you try to be a role model for women in the business world? Well, I think it's really important to have diverse voices at the table. Absolutely, no matter what you're doing. And and in business, particularly because, you know, most consumers are women also. I have built two businesses in partnership with women. We started the first. This is unbelievable. Thirteen years ago, my partner Deb Harmon and I started the first woman owned real estate private equity firm in the United States. It's hard to believe. Thirteen years ago, there wasn't one. Today, where we compete a little bit with Carlyle, we're much smaller than Carlyle, but we compete sometimes with Carlyle. But we've built a real firm and one of our ambitions with the firm, my partner Deb and I at the time, we'd each been more than 20 years in real estate. Real estate's a very male dominated field. One of our missions was to be excellent and superb, to deliver great returns to our investors, but also to help diversify our industry. Recently, you've been selected as the first woman in Harvard's nearly 400 year history to be effective, the chairman of the board of Harvard. So how did you have time for that and why were you so committed and interested in doing that job, which is a very, very time consuming position? Well, first of all, Harvard is near and dear to my heart. I went to college there and I went to college at a tumultuous time in my life. And it really served a very grounding as a very grounding place for me. I met all kinds of people that have really influenced my life. I have dear, dear friends from my experience at Harvard. And I think higher education is under attack. And I like a challenge. And frankly, after three hundred and eighty six years, it's about time they had a woman leading. And so I felt also a call to rise to that occasion. Our record narration is the 12 people that more or less run Harvard. It's like a board and you're the senior fellow or the chair of it. What do you really do during that effort as a senior fellow? What is your responsibility? Well, David, as you know, cause your serve on the corporation with me. I'm we're a board really of. We have two roles. We really advise the president and the senior leadership of the university on very significant issues that are affecting either the schools or the university at large. We're involved in financial decisions. We're involved in governance decisions during Covid, lots of major topics that we worked with the university on. So we have the fiduciary duty as a corporation. The senior fellow is the leader of the corporation. It's like a lead independent director, if you will. And it's, you know, Harvard, like the university, Chicago, like many, many of our see significant universities in this country. They're very important to the success of our country. And it's important that these institutions thrive and. I find it very stimulating to try and be a good adviser and thought partner to the leadership of a university. So some people have suggested that you would be a candidate, a good candidate for United States Senate or the presidency itself. Have you ever thought of running for anything like that? No, I don't think I would be a good politician. I think I'm a good leader and manager, but I'm not sure I'd be a good politician. Well, suppose somebody gets elected a president who is a Democrat and says, I'd like you to come back in government as secretary of treasury or secretary of state or something. Would you go back in government? I would never rule out serving my country, but I'm really excited about what I'm doing today in business and philanthropy. Suppose somebody says I want to be Penny Pritzker. A young girl says I like what she's done. Business, government, family, philanthropy. How are you? Tell somebody they can achieve what you've done. Is it working hard? Studying hard? Getting along with people? What are the skill sets that you think are most important? Well, I think one of the most important things to do is to recognize that life is a team sport and that you can't do anything alone. And it's important to be surrounded by people are good at the things you're not good at and good at the things you are good at, but also surrounded by diverse voices and diversity of all types. And I really got to see that in government. I think the second thing that's important is to have an open mind, to be curious, to have a growth mindset, to listen and to be constantly learning and growing. And then I think it's important to be empathetic and, you know, to care about humanity.

The David Rubenstein Show: Penny Pritzker

Former US Commerce Secretary and PSP Partners Chairman Penny Pritzker talks about breaking into male-dominated businesses, her philanthropic efforts in Chicago and her friendship with Barack Obama. She speaks on "The David Rubenstein Show: Peer-to-Peer Conversations" recorded Jan. 24 in Chicago. (Source: Bloomberg)

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