Career path: From cold war diplomat to banker and headhunter

David Schwartz is a senior partner at Gow & Partners, a financial services headhunting firm. A graduate of Stanford University and MIT, he has had a varied career beginning in government and a political think tank before alternating between investment banking and headhunting. He lives in New York City.

People say you never know which direction life will take and the same goes for your career. Had someone told me when I was in my twenties that I was going to be a headhunter, I would have been incredulous. I was set on becoming a diplomat.

In pursuit of that diplomatic career, I majored in political science at Stanford, before getting a PhD in the same field at MIT. When I graduated in 1980, I joined the State Department, specialising in US-Soviet relations and nuclear arms control. It was an exciting time to be a diplomat - the height of the cold war, just before Glasnost. I got to participate first hand in the last gasp of a two-superpower world.

In 1985 I was asked by the State Department to spend a year at a London-based strategic think tank. By that time I was getting a bit 'burned out' in my government position. No one seemed to agree on what needed to be done.

It was then the financial world caught my attention. I felt banking would not only be much better paid than government, but would keep me in contact with international events. Equally, people in the industry were at least in agreement on the fundamental objective: to make as much money as possible for clients and themselves.

It was a good time to make a move. 'Big Bang' was about to happen and the London banking world was being shaken up. In 1986 the big US firms were looking to establish beachheads in London. Goldman, Salomon, Merrill and Morgan Stanley were all hiring. I was lucky to come knocking just when the door was wide open.

In late 1986 I got a job with Goldman Sachs as a Eurobond trader. The next few years were incredibly exciting - much of my experience was really straight from the pages of Michael Lewis's classic book Liar's Poker: life was fast paced and I met some fascinating characters.

Twenty years' ago trading was a very different business. The market was less transparent. Market makers would trade directly with each other and because you didn't really know what prices they were making to clients, you wouldn't necessarily know what they were trying to do. Part of the skill was being able to constantly read between the lines of the positions being quoted, to try and figure out what actually was going on, vs. what you heard.

Things went well at Goldman and in 1987 I was made European government bond product manager. Then in 1988 I was made chief administrative officer for the whole European fixed income division. I was responsible for budgeting and expense control, management information, compliance, IT delivery - and staffing. This was my introduction to the world of recruitment.

Bond trading had been fun, but I felt this was better. I was involved in not just generating profits, but creating the infrastructure that allowed those profits to grow. The business went from nothing to an enormous operation making a lot of money. I hired around 100 people. When hiring in those quantities you get to know exactly what you are looking for: people who are bright and analytical, with a high energy level and real passion for the interest rate markets.

Goldman's fixed income trading results were volatile. By the end of 1994, a major downsizing was underway. Being in a non-producing role, I was vulnerable and found myself out of a job.

This didn't come as a great surprise. I could see it coming: the firm wasn't doing very well; the London office wasn't doing very well; and I was then in a new role rebuilding the operations and technology division, which didn't have a whole lot going on. Nevertheless, I hadn't planned ahead for redundancy. I hoped I might find a new role internally.

I didn't. Goldman put me through an outplacement process. I spent six months out of the market, contemplating what I might do next and looking for similar roles in banking. Then, out of the blue, one of the recruiters I was talking to said he thought I might be good at his job! He asked I would run his office, Futures International, in London. It was May 1995.

It was a happy coincidence. The outplacement people had analysed my strengths and weaknesses, and said I was better suited to a 'people' job than a 'market' job. Executive search was an excellent way to focus on my interpersonal skills while keeping one foot in financial services.

It took quite a while to adapt. Persuading perfectly happy people that they would be better off elsewhere is a fine art. You need a relationship with the client and the candidate, and that cannot be built in a five-minute telephone conversation.

I spent about four years headhunting, both running my own business and working with established firms. Then, in 2000, I was able to take advantage of one of the key elements of being a people person: not burning bridges.

Goldman Sachs invited me back. The firm had emerged from the quiet period. An old colleague called me directly and asked if I would run the whole of HR for investment banking in Europe. I was surprised and delighted: I said yes.

It was an exciting time, but I ended up having to make some difficult decisions. In October and November 2000 the investment banking business came to a sudden halt and it became apparent we would need to downsize. Letting go of a large number of highly skilled bankers, many of whom have become friends, is hard.

We were forced to pick people who were 'underperformers' in terms of the Goldman performance review system. They would have been top notch bankers at almost any other institution.

In June 2002 I was asked to come back to New York to run campus recruiting for the investment banking division globally. I returned and began to take on the role, but in early 2003, Roddy Gow, a headhunter who had competed for mandates at Goldman, asked if I would be interested in moving back into search in a New York-based position with his new firm.

I thought long and hard before coming on board. Goldman is a spectacular firm, and I had spent most of my working life with them. But Gow & Partners was offering an opportunity to combine senior level executive search with a corporate governance advisory product for public company boards. It seemed too attractive to pass up.

My career has been varied and occasionally unpredictable. I've gone from focusing purely on the bottom line as a bond trader, to focusing on the people that help that bottom line grow.

It's been a cumulative process: the skills I've learned from one assignment have led to another and the path I've taken has reflected my own personal growth. But the 23-year-old MIT graduate who wanted to be a diplomat would probably have been surprised.

david.schwartz@gowpartners.com