John Mack, Morgan Stanley CEO, prioritized teamwork over industry greed.

In 1992, John Mack, the head of Morgan Stanley's Operating Committee, saw a deliveryman waiting by the elevators when he arrived for an 8 am meeting. After the meeting, the man was still there. Mack asked if he had called the recipient, and the man said he had called “twice”. Mack took the recipient's number and called him, instructing him to collect his delivery immediately. He emphasized that everyone, regardless of their job or wealth, has equal value.

Mack scolded the employee for being disrespectful to the diligent deliveryman and warned that such behavior could lead to dismissal. He insisted that Morgan Stanley staff treat everyone with respect, both inside and outside the company.

Over his four decades on Wall Street, Mack noticed that investment bankers and traders often display fierce competitiveness and aggression, constantly seeking money and believing in their superiority. His reprimand to the inconsiderate trader was an effort to stress the importance of mutual respect.

Mack sees decision-making as fundamental in leadership

John Mack emphasizes that effective leadership, whether in business or family life, involves making tough decisions even when the outcomes are uncertain. He criticizes leaders who shy away from conflict, surround themselves with yes-men, criticize their employees, and view money as the “sole motivator.”

Mack, naturally confident, had to learn to inspire confidence in his team and demonstrate that their combined abilities were greater than their individual strengths.

Mack chose Morgan Stanley for its excellence and tradition.

In his initial years on Wall Street, John Mack worked at three different firms, seeking a fulfilling role at a top-tier company with a strong culture. Initially, he turned down an offer from Morgan Stanley but later realized his desire to work in a competitive environment with ethical colleagues.

Mack joined Morgan Stanley in 1972, where he started selling corporate bonds. He was impressed by the company's deep-rooted traditions. The traders were well-dressed, sitting at classic roll-top desks. Employees enjoyed free lunches from fancy menus and dined in a formal room with white-gloved waiters. Witnessing Morgan Stanley's commitment to these traditions and its genuine care for employees, Mack felt joining the company would allow him to be part of something bigger than himself and his aspirations.

Mack showcased corporate relationship importance while expanding Morgan Stanley's business

Mack joined a new sales and trading group with the task of attracting corporate bond clients. He traveled across the United States, including to Pittsburgh, where he had previously built a strong relationship with Mellon Bank, one of his most profitable accounts.

Mack's connection with Mellon Bank led to a significant deal early in his career. He spent a lot of time persuading Chase Manhattan, a major commercial bank, to work with Morgan Stanley. Chase wanted Morgan Stanley to help raise funds by offering five-year certificates of deposit (CDs). Mack contacted Jerry Elm at Mellon Bank and successfully sold $20 million worth of CDs.

Several managing directors, some of whom had not previously been to the trading floor, praised Mack for this sale. They saw it as a sign of his ambition and potential to become a valuable asset to Morgan Stanley.

Mack improved from his sales department managerial errors.

Mack had the perfect traits for a successful sales career. He was outgoing, enjoyed conversing with potential clients, and excelled at cold calling. His exceptional reputation in the field caught the attention of the Salomon Brothers, but Mack's loyalty remained with Morgan Stanley, which eventually promoted him to sales manager.

As the new head of the sales department, Mack made a dramatic entrance by clearing everything off the main desks, known as "the turret," where sales calls were handled. He declared that the turret would always be staffed, with no exceptions. When he once found it unattended, he made a point of dumping the desk contents on the floor and waiting for the embarrassed employees to return. After that, the turret was never left empty again.

Mack was uncompromising about customer service, a cornerstone of Morgan Stanley's reputation. However, his transition to management was challenging. Known for his hot temper, stubbornness, and high demands, he often publicly reprimanded underperforming salespeople. Focused on success and advancement at Morgan Stanley, Mack acknowledged that he sometimes neglected his employees' feelings.

Value feedback and criticism for personal growth and learning

John Mack, despite missing the thrill of selling, focused on building a top-notch sales team at Morgan Stanley. He actively participated in sales calls and encouraged his team to provide honest feedback. Mack believed in open, face-to-face conversations and never hesitated to receive criticism.

Unlike many managers who dislike criticism, Mack welcomed it. He aimed to create an environment where employees felt safe sharing their thoughts. Mack valued his team's intelligence and wanted their honest opinions, not blind obedience. He believed that if Morgan Stanley hired the best people, their input should be valued.

Morgan Stanley's choice to become publicly traded brought significant profit

In November 1978, Mack reached a high point in his career at Morgan Stanley when he was asked to become a partner, a moment he cherished alongside his family. This promotion coincided with a time when financial firms were expanding internationally due to advancements like better phone systems and fax machines.

Years later, Mack was part of a small group that decided to make Morgan Stanley a public company in March 1986. This decision was significant because Morgan Stanley had always been privately owned. Some partners were hesitant, fearing it would change the company's culture, but Mack and others believed it was necessary for growth.

• When Morgan Stanley went public, 20% of its stock was available for purchase.
• The initial price per share was $56.50.
• Due to high demand, the stock closed at $71.25.
• This move raised $300 million for the company.

“Mack the Knife” expected top performance from all employees.

As a manager, John Mack understood that firing employees was sometimes necessary to maintain a functional team. He believed in acting swiftly and decisively to address issues, even if it meant facing backlash. During his time leading the Fixed Income Division, Mack fired several traders at closing time, earning him the nickname "Mack the Knife."

Mack considered dishonesty a serious offense. When a team member tried to expense personal dinners as client meals, Mack immediately addressed the issue. He called the employee into his office, explained why the behavior was unacceptable, and made it clear that cheating the company was also cheating colleagues. The employee left without argument, demonstrating Mack's zero-tolerance approach to dishonesty.

Mack's Critical Decision During the Financial Crisis
On September 12, 2008, around 5 pm, Tim Geithner, the head of the New York Federal Reserve, called Mack and other bank CEOs for an urgent meeting at 6 pm. This was just after the government took control of Fannie Mae and Freddie Mac, and Lehman Brothers was about to fail. Bear Stearns had already collapsed in March, which led Morgan Stanley to save up $131 billion. Geithner wanted the CEOs to come up with a plan to rescue Lehman Brothers and prevent a major financial disaster.

Lehman Brothers filed for Chapter 11 bankruptcy that Monday, the largest bankruptcy in U.S. history. Morgan Stanley's stock prices fell sharply, and the company needed money to stay afloat. Mack tried to keep his employees calm, but the stock dropped to $11.70 on September 18. In a desperate search for funds from Mitsubishi, Mack got a call from U.S. Treasury Secretary Hank Paulson, Fed Chairman Ben Bernanke, and Geithner. They offered Morgan Stanley a choice: file for bankruptcy or be bought by JPMorgan.

Mack respected their advice but refused to risk the jobs of 45,000 employees. He said, "I could tell that my pushback encouraged everyone at Morgan Stanley. I could see it in their postures and faces." Mack chose a different route and secured a $9 billion deal with Mitsubishi, saving Morgan Stanley from bankruptcy or acquisition.