Sandra Navidi - SuperHubs - How the Financial Elite and Their Networks Rule our World

The hierarchy among participants is visibly displayed on the color-coded badges. Royalty, such as Prince Haakon of Norway, King Abdullah of Jordan, and King Philippe of Belgium, and heads of state, such as Chancellor Merkel and President Putin, range at the top of the pecking order. One member of the WEF foundation board mentioned to me with an eye roll that in their meetings, everyone must rise when Queen Rania enters the room. Dignitaries usually fly in by helicopter and block the roads with their motorcades, but some of them, like Prince Haakon or Prince Andrew, are quite approachable. Tech giants such as Eric Schmidt and Sergey Brin of Google are also considered VVIP because of their “coolness factor.” Another visually demonstrative status marker is the WEF car pass, available only to the most financially potent attendees. Limousines carrying the highly coveted license have access to all parts of town, including the Congress Centre. Their lucky passengers are chauffeured right into the garage underneath the conference facility. Even in the rarefied world of Davos, some attendees are more equal than others. Although the environment lends itself to mixing between disciplines and industries, homogeneity often prevails and media, tech, and finance people cluster around one another.

The parties, which are among the most efficient places to network, are also subject to a hierarchical order. The most popular one is the Google party, which boasts several hundred people but without exception only admits registered guests. I have witnessed the CEO of a major U.S. multinational corporation denied access because he was not on the list. He threw a major fit (“Do you know who I am??”) and has had a standing invitation ever since. In 2014, instead of the traditional big bash, Google hosted a smaller gathering at the new Intercontinental Hotel with Grammy Award winner Mary J. Blige. The superexclusive event featured tycoons such as Michael Dell, Richard Branson, and Bank of America CEO Brian Moynihan. The competing McKinsey party, the next-hottest ticket, was still bursting at the seams. The bank, CNBC/Financial Times, Forbes, and Burda DLD Nightcap receptions range on a similar level. It really comes down to personal preference, although events with no particular barrier to entry are less exclusive. After years of firsthand experience, I must say that most of the parties are overhyped and fairly similar. Especially at the WEF, the same people circulate everywhere, so if you remain at the geographic nucleus, everyone will pass by eventually.

The most exclusive events are the private dinners and ultrasmall parties, although they have the drawback of sticking you with a limited number of people for an inordinate amount of time—time that could perhaps be better spent networking with dozens of people at a reception. The advantage of a dinner is, of course, that people connect more deeply over shared meals and engage in longer conversations that surpass the small talk. Whenever I receive an interesting invitation, I usually accept. At the dinner hosted by Hong Kong tycoon Victor Chu, my tablemates were a Bahraini crown prince and the CEO of BASF. The smallest parties do not have a list at the door, only heavy security, such as the gathering of Elizabeth Murdoch and Matthew Freud at their rustic chalet on top of the Magic Mountain behind the Schatzalp Hotel. The extra effort of taking a cable car up the mountain followed by a ten-minute walk through heavy snow was rewarded with conversations with interesting people such as actress Charlize Theron, whom I would otherwise not have met.

Another encounter that could only be had in Davos took place with Vladimir Putin. A few years ago, the Russian president sent out heavy, cream-colored invitations printed with raised gold ink and decorated with the coat of arms of the Government of the Russian Federation, requesting the pleasure of one’s company at an after-dinner reception. I did not have any business in Russia but had not met Putin before, so I attended out of sheer curiosity. The event was a study in status, hierarchy, networks, and the gravitational forces that a superhub possesses. It took place at the banquet hall of the Arabella Sheraton Hotel Seehof. Entering the hotel was like immediately setting foot in Russia. People looked and dressed differently and made no effort to speak English. Usually, the most sophisticated security is “invisible,” but here grim-faced bodyguards, who looked like KGB agents right out of central casting, visually relayed very convincingly that it was better not to mess with them. Famed but controversial conductor Valery Gergiev, a close friend of Putin, conducted a small Russian orchestra to great applause. Russian music, Russian caviar, and Russian vodka were all in abundance—but there was only one Putin. As I had never seen before at a cocktail party, guests formed a giant circle around the president, like a membrane encasing its cell, slowly moving with him as he circulated the room. Such a large group, of mostly blue chip CEOs, bowing to the autocratic leader of a country with questionable policies was a curious sight.

I had little patience for this collective fawning and set my foot in Putin’s path: “Now it’s the lady’s turn!” I said. Then I switched to German, which I knew he spoke, to throw him off guard so as to gain extra time to think about what to say next. But rather unexpectedly, he turned the tables on me, immediately responding in nativelike German without blinking an eye. I made a teasing remark on the Russian energy supply for Germany, which at the time was at dispute, but looking into his bare blue eyes, I sensed that we did not necessarily share the same sense of humor. I briefly froze and then swiftly pulled forward a CEO standing slightly behind me and said, “Oh, Dr. Kleinfeld also wanted to speak with you.” And with that, do svidaniya, I hightailed my way out of there.

Even during the height of the Ukraine crisis in 2015, the resilient Russians, who had been largely shunned by the Western community politically as well as economically, showed up at Davos, seemingly unfazed by the turmoil. Many of their bigwig CEOs were in attendance, as were eight Russian billionaires, and they unabashedly hosted lavish parties just as they had in previous years. Admittedly, the mood was somewhat subdued, and Western CEOs uniformly characterized the situation as awkward. The all-inclusive emperor of networks, Klaus Schwab, true to form, made it a point to specifically and explicitly welcome his Russian friends.

THE GLOBAL FINANCIAL POWER CENTER:THE INTERNATIONAL MONETARY FUND

The International Monetary Fund . . . yawn. Sounds boring, right? Well, it had been a rather bureaucratic and unexciting institution until the financial crisis, which proved to be a turning point—and not just because of its colorful new leader, Dominique Strauss-Kahn. In 1944, 44 countries came together in Bretton Woods, New Hampshire, and set up the IMF and World Bank to establish and monitor a new currency regime. By the time the financial crisis rolled around in 2008, the IMF had grown to 188 member countries.

It has established itself as a platform for international policy makers. Due to its status on the political metalevel, representatively diverse setup, formal yet flexible decision-making process, and combined brainpower, the IMF is uniquely qualified to take a leadership role in coordinating and helping to implement rescue measures. Generally, its meetings are attended by central bank governors, finance ministers, bank CEOs, rating agency executives, executives of policy bodies, and other international institutions, think tanks, and academics.

Washington, D.C.: The Financial Shadow Capital

The IMF hosts two main meetings per year: the Spring Meeting with about 4,000 participants that mostly revolves around policy and the Annual Meetings in the fall with 12,000 attendees. The latter includes private sector representatives, such as bankers and fund managers. In addition, many other institutions organize “shadow conferences.” While not officially affiliated with the IMF, they host client conferences thereby taking advantage of the fact that so many important financial sector representatives congregate in one place by holding parallel client conferences. The IMF’s 2,500 employees from 150 countries are housed in two huge, nondescript concrete buildings in Washington D.C., near the quaint Georgetown neighborhood.