Bob Diamond MBA ’77, H ’06, an international financier and the former CEO of Barclays, shared his perspective on business success, the financial industry, and the attributes that make an outstanding employee at a UConn leadership event last week.
Perhaps his strongest message centered around the importance of culture in the success of any business.
Diamond told the audience he had worked at organizations that demanded every employee give their best each day, and at organizations that were so cut-throat that no one trusted anyone. His experience at both shaped his expectations as a leader.
“When I was in the unbelievably privileged position of being the CEO [who was] building Barclays Capital and Barclays Global Investors, and we talked about culture, I actually knew what I meant by it. Culture is simply defined as how people behave when no one’s watching,’’ he said.
“The more you get to know your partners, and trust the people you work with, the more one understands it. I think talent and culture are the two most important parts of building a successful organization,’’ said Diamond, who led the organization for about 18 months starting in 2011. Today he is the CEO of Atlas Merchant Capital.
‘For Knuckleheads Like Me, That Was Nirvana’
Diamond was the keynote speaker at the School of Business’ Rosenberg-McVay Business Leadership Series, which brings leading executives to UConn to discuss important topics in business.
Some 125 students, alumni, and faculty attended the program on Wednesday, Sept. 16, at President Radenka Maric’s home. The program was moderated by Debra Hess ’86 (BUS), the retired CFO of NorthStar Asset Management.
Diamond regaled the audience with insight, advice and even tales of business operations before the advent of cell phones and email. But he also spoke excitedly about how the financial industry will change in the next five years.
Diamond earned his bachelor’s degree in economics from Colby College and came to UConn to pursue an MBA. After graduation he and three friends lived in an apartment in Willimantic and had a door papered with rejection letters from prominent companies.
He was offered two jobs, one with IBM and the second with U.S. Surgical, a pioneering surgical stapling and medical device company, now part of Medtronic. He accepted that job, earning less than $11,000 a year, because the management was driven.
“They had a ‘move up or move out’ philosophy, with pay-based performance bonuses,’’ he recalled. “For knuckleheads like me, that was nirvana.’’
He encouraged the students in the audience to seek a job with bosses they respect and colleagues who are motivated and thriving. That doesn’t mean that there won’t be hardships, he said, recalling a two-year period when he anticipated promotions that didn’t come. But eventually it will pay off.
Advice to Students: Be Smart, Work Hard, Have a Good Attitude
His next career stop was in information technology at Morgan Stanley. Instead of working in company’s plush New York City offices, he was stuck in a cavernous, windowless building. But Diamond says he tried to exceed expectations and if someone needed help, he’d hop on the subway and arrive at their door. His commitment to excellence and the reputation he developed led to prestigious promotions.
“At Morgan Stanley there was never a ‘behavioral training program,’” he said. “There was just an expectation that you do a first-class job in a first-class way.’’ That expectation created a workplace of support, partnership, and success.
After 13 years, he took a job with greater responsibility at Credit Suisse (later acquired by UBS), and he describes the culture at that time as secretive and cutthroat. “In some ways, I needed a taste of both cultures to know what I wanted,’’ Diamond said.
He developed a leadership mantra in which two things were imperative: never hire anyone with a title they haven’t yet achieved; and never hire any jerks (though he may have used a stronger term). “We all agreed that if you can’t get along with partners, you have to leave,’’ he said.
Diamond, who had taught multiple UConn classes as a graduate student, seemed eager to encourage the students before him. He said the financial industry is welcoming to smart and hard-working students. He encouraged them to excel academically, to develop real-world experience through internships and experiential opportunities, to keep a good attitude and never compromise their reputation.
The 2008 Financial Collapse and the Future of Banking
During the 2008 financial crisis, Diamond had “a front-row seat’’ to the disruption in the financial the industry. After Lehman Brothers filed for bankruptcy in September, Barclays agreed to acquire its North American investment-banking and capital-markets businesses, as well as 10,000 employees.
It was a bold decision that Diamond and other executives had anticipated. By hashing out possible scenarios beforehand, the leadership team was able to move quickly and decisively. The acquisition of Lehman’s North American investment-banking and capital-markets operations, allowed Barclays to expand its presence in the U.S.
Diamond lauded praise on Henry Paulson, US treasury secretary at the time, and Bob Steel, under-secretary of the treasury then, for their emergency negotiations and wisdom.
“We need a financial system that’s safe and sound, but that also supports job creation and the economy,’’ Diamond said. He saidhe’s proud of America and our government for its role in supporting financial institutions but also offering safeguards and clear expectations.
“As a result, U.S. banks today are strong and growing. The U.S. has the deepest and most diverse financial services companies in the world. No other country can compare at all,’’ he said.
He anticipates that the financial services industry will change in the coming years. Today there are some 4,000 regional and community banks. He predicts that through mergers in coming years that number will drop to about 1,500.
The nation is at an inflection point between traditional financial services and crypto/digital ones. Blockchain offers many advantages, including 24/7 service, permanent transaction records, speed, and cost savings. Within three to five years, he predicts blockchain will be integrated into traditional banking in this country.
“All we’re doing is digitizing banks,’’ he says. “In the Middle East, everyone is using stablecoin. It’s coming here too.’’
