Act your age!
With MF Global we had a CEO that needed to be encouraged to act—not his age—but his position.
Jon Corzine—former Goldman CEO, former US Senator, former New Jersey Governor—was enamored of trading. He loved the feel of it, the flashing monitors and emotion of the trading floor. When he visited MF Global’s Chicago office, he spent over an hour chatting up a minor derivatives trader about his trading book, as other top executives hovered impatiently nearby.
Trading is a bug that gets into your system. Traders recognize other traders. They love math-intensive betting games like Liar’s Poker and backgammon. They’re constantly calculating odds and risk/reward ratios. Trading often isn’t about personal profit, it’s about winning a competitive game.
Corzine thought that a few winning trades could build up MF Global’s capital base and help them reduce their leverage ratio. He had his own trading blotter; he initiated trades on his Blackberry; he would rush out to check the market. Corzine was a central part of MF Global’s trading culture.
There’s nothing illegal about this. But there’s something unseemly about a CEO involving himself in the day-to-day trades of a $40 billion broker. He should be focusing on leadership, on recruiting and retaining the right talent, on setting strategy and achieving mileposts. Instead he was down in the weeds worrying about his daily marks.
When the CEO acts like a trader, he’s not leading. With no one leading, it’s no wonder the ship veered off course.
[display_podcast] Age Appropriate