Market Mover

by Robert Greifeld

  Opening-bell events always were a hit with our companies, even more so when they were on location. The first time we did one remotely was with Cisco in 2005 in San Jose. Nasdaq employs a great deal of Cisco equipment in its technology back end, and the idea of doing a virtual opening, using Cisco equipment, was too good to pass up—especially given that Nasdaq was the world’s first virtual stock market.

  When a company celebrates an IPO or an anniversary, as it was with Starbucks or Cisco, it’s a chance for a business to reflect for a moment on itself. It’s like a significant birthday for a whole organization, and especially for a public company. I was always struck by how much interest there was in these celebratory milestones, whether it was popping champagne corks before the opening bell at Nasdaq MarketSite in Times Square, or all-night “hackathons” with the employees of Facebook before their morning IPO, or Starbucks fans sipping early-morning lattes in Seattle, or remote openings in various cities in Asia. I have such fond memories of all those occasions. Like few people in business, I was able to vicariously participate in hundreds of landmark moments in the lives of the organizations in the Nasdaq ecosystem.

  Just like individuals, organizations also need to celebrate milestones, to reflect on where they came from, their accomplishments, their role in creating economic opportunity, and the investors around the world who believed in the vision. Nasdaq is a go-between for these companies to interface with millions of shareholders and stakeholders around the world. Its function is more than the facilitation of trading; it’s providing a connecting point between the great companies of the world and the capital—both economic and social—that makes them viable.

  A President in Waiting

  “He’s waiting. Get here as soon as you can.”

  Bruce sounded agitated, and I understood. “I’m leaving now: I’ll be there as soon as possible.” Unfortunately, in New York, “as soon as possible” could mean anything, and I was already behind schedule. I had just left Nasdaq’s headquarters and was headed uptown to meet Donald Trump at Trump Tower in Midtown Manhattan.

  As I hung up the phone, I looked out the window at the bumper-to-bumper traffic on Sixth Avenue. Not a good sign. Among Nasdaq EVPs, my reputation for punctuality was… well, less than stellar. But sometimes there just were not enough hours in the day. This was 2005, and the future President was just a larger-than-life businessman. He had reorganized his casino business and was looking to list again on public markets. His name was quite the popular franchise, and I certainly wanted to win the listing. A half hour later I pulled up to the front of the gold-accented tower with Trump’s name emblazoned above the doors, and headed up to meet the man himself.

  Many years later, this building’s lobby would become the scene of frenzied media activity as a breathless horde of reporters blanketed the entrance after Trump’s 2016 election victory, while his government-in-waiting strategized on the floors above. But for now, it was just another bustling office building in New York, and I hurried up the escalator with some urgency.

  Trump didn’t seem at all fazed by my tardiness. He was charming and gracious, inviting us to have a seat. As we began the conversation, and Trump launched into his plans for Trump Entertainment Resorts, I felt something was slightly off, but it took a moment to realize that it was our relative height—we were sitting lower than Trump, who sat noticeably higher, behind a huge desk, smiling down on us, his broad face perched over his red power tie.

  Whatever your politics today, it’s impossible not to notice that Trump has authentic star power. I had first encountered the Trump phenomenon some years before, when I met him at a MarketSite opening bell for Nextel, the wireless communications company. They had formed a partnership with NASCAR, and Trump was being paid to help promote the brand. I’m impressed that even then Nextel recognized Trump’s appeal to the working-class demographic that is NASCAR’s primary audience. I rang the opening bell, standing next to Trump, Melania, and Kurt Busch, that year’s NASCAR Cup champion. After the event, we walked out into Times Square together, and Trump was simply mobbed with fans. I’m not sure I could explain his magnetism, but it was remarkable to see up close.

  In that meeting at his eponymous tower, Bruce and I offered Trump the TRMP ticker symbol and talked about what Nasdaq could offer the company in terms of trading, investor relations, and publicity. After some high-profile bankruptcies and a damaged reputation, his business star was rising again, and his celebrity power along with it. The IPO market was still depressed in those days, and any new listing helped. Winning a celebrity IPO wouldn’t hurt, either. As we discovered in the meeting, we had the inside track due to Trump’s bad experience with NYSE.

  “Just so you two know, I hate the New York Stock Exchange,” he told us. This was long before Trump met Twitter, but already, I suspected he was not one to mince words.

  “Well, it probably goes without saying that we are not huge fans of the New York Stock Exchange either,” I replied. “What happened with you?”

  “I had some of my casinos listed on the exchange, and they ran into trouble. The business went bankrupt, and we had to delist. The people at NYSE were very nasty about it.”

  Bruce looked at me, and then at Trump, before responding very deliberately: “Just so we are clear, Mr. Trump, if you go bankrupt while on Nasdaq, we will also delist you.” And then he paused, continuing with a slight smile, “But I promise that we’ll be super nice about it.” And that was exactly what happened. A few years later the business did go bankrupt, and we—very nicely—delisted it.

  The Once and Future Capitalists

  In 2006, Nasdaq managed to attract two-thirds of the available IPOs in the market. Indeed, in the perpetual contest with our competitor down the street, we felt an increasing edge. We were making headway on my fifth priority: Stop being satisfied with No. 2.

  The search for competitive advantage, however, was not circumscribed by our nation’s borders. At home, we were competing with NYSE; on the world stage there were two other competitors with global reach: London (LSE) and Hong Kong (HKEX). A particularly rich market for new global listings was China. I spent a fair amount of time there, courting the executives of upstart firms. Listings was an unpredictable business on American soil; it was doubly so in this unfamiliar culture.

  It was on my first trip to China that I began to realize just how much the Nasdaq brand meant worldwide. I simply wasn’t prepared for the kind of media coverage we received. My team had arranged a press conference, and a veritable horde of journalists showed up, writing down every word, snapping my photo like paparazzi chasing a movie star. For a brief period, it seemed like I was at the center of the media universe, and I will confess to having a moment of self-inflation. But it was fleeting. I quickly realized that my newfound fame had nothing to do with me personally. Those paparazzi weren’t chasing me; they were hoping to get close to the Nasdaq brand, and to American entrepreneurialism. It was quite an experience to feel, so directly and powerfully, the Chinese interest in our economic model. Granted, my exposure was to a certain slice of the population, but my impression was that the Chinese are natural capitalists. What still amazes me, after many visits to their great nation, is not that they have embraced entrepreneurial capitalism, but that they ever turned away from it in the first place.

  I did witness an evolution in my visits to China. In my early trips, during 2003 and 2004, it seemed that anything American had a certain golden aura. Companies wanted to be like American companies—a Chinese version of Google (Baidu), for example. But that changed over the years. By the end of the decade, business leaders expressed less interest in copycat formulas; rather, they aspired to their own innovations. Their confidence in their independent economic vision was growing.

  Occasionally, on those trips, I encountered some surprising cultural mismatches. Before one appointment in Beijing, I read in my briefing notes that the CEO I would be meeting liked to hunt. I’ve shot some birds in my day, and thought this line of conversation mi
ght be a way to bond with a prospective customer.

  “What do you hunt?” I asked.

  “Chickens,” he replied.

  Chickens? “How do you hunt a chicken?” I inquired, trying to hide my surprise. Was something getting lost in translation?

  “They’re in a pen. We shoot them,” he explained enthusiastically.

  As I regained my poker face, I made a mental note to excuse myself from any proposed hunting trips.

  There were other memorable moments of cultural dissonance—some funny and incongruous, others surprising and strange. We would often end our evenings with a bountiful dinner party with plenty of food and endless toasts. It must be said that the Chinese palate embraces a wide variety of foods that are not found on the Western plate. In one dinner table conversation, a new Chinese business associate explained the Chinese relationship to food through a joke.

  “Imagine that an ET came to Earth,” he began, leaning over with a slight conspiratorial air as we sat around a large dinner table. “The Americans would do everything they could to study and scientifically understand ET. The Russians, on the other hand, would try to figure out how to turn ET into a weapon. But the Chinese”—he paused for dramatic effect, and I waited for the politically incorrect punch line I was sure would follow—“the Chinese would spend all of their time figuring out which part of ET was best to eat!” He had burst out laughing before the joke was finished.

  In most respects, the cultural differences were easy to overcome. It’s a cliché but it’s true that people are people all over the world. Beyond the superficial particulars of culture and geography, there were so many ways in which the Chinese executives were just like their American counterparts. I made lots of new friends and developed many good business relationships during my trips. What’s happening in China right now has little precedent. It’s the biggest migration into the middle class in history. They have tremendous challenges ahead, but the business community is learning fast and evolving at a remarkable speed. Nasdaq-listed companies like Baidu, Weibo, and JD.com are now globally recognized and respected brands. It was an honor to help facilitate, with Nasdaq’s investor credibility, the evolution of their access to global capital and public markets.

  Indeed, this was the deeper meaning I found in leading the listings business, both at home and abroad. Amid all the hoopla of pomp and celebrity, and the thrill of the competitive spirit, it reaffirmed for me that Nasdaq is not just a business—it is also a global platform for supercharging innovation and entrepreneurial capitalism in our society. I know that sounds like a line out of an annual report, but I came to see truth in it. There is very little historical precedent for the global reach, scale, and public transparency that Nasdaq (and other similar exchanges) brings to the world of investment. Money may make the world go round, but it’s only money well allocated that actually transforms economic capital into social and technological progress. That enables visionaries to do what they do best—rewrite tomorrow with a script that reads better for us all.

  LEADERSHIP LESSONS

  • Build Your Brand Through Affiliation. Your customers are often your best brand ambassadors.

  • Not Every Sale Is a Cost-Benefit Analysis. Human choices are driven by multiple factors, some personal, some tribal, some transactional. Take the time to understand what really makes your customers tick.

  • You Don’t Win a Customer Just Once. Great customer relationships need to be tended to and constantly renewed.

  Chapter Six

  A Political Education

  SEC Alters Rules on Stock Trading in a Narrow Vote

  Wall Street Journal, April 7, 2005

  If you had the chance to chat one-on-one with the great innovator of our time, what would you talk about? When I found myself alone with Steve Jobs for ten minutes, strangely enough, the conversation turned to regulation.

  It was sometime in the mid-2000s, and Nasdaq was hosting a meet-and-greet with political leaders and CEOs over breakfast in Silicon Valley. Recently appointed Treasury Secretary Hank Paulson was the speaker that day. I arrived early, and when I entered the room only one of our guests had arrived. Jobs was sitting quietly off to the side. After years of working and negotiating with the world’s top business leaders, I’m not starstruck easily, but Jobs had a certain aura about him that was unmistakable—a quality of unusual intensity and focus. After exchanging pleasantries, we struck up a conversation.

  “We’re going to hear about politics and regulation today, right?” he asked. “Thank God I don’t have to deal too much with that world.”

  “Unfortunately, I can’t avoid it,” I replied. “For the most part, Nasdaq can’t make a serious business move without oversight and approval. It’s just something we live with.”

  Jobs looked sympathetic. “I can’t imagine trying to function in a business that is so highly regulated. It’s not something I’ve ever had to do. I’ve been lucky. All my business initiatives have been in largely unregulated areas.”

  “I’m used to it now,” I reflected, “but I admit, there are moments when I feel like the beaten stepchild of the SEC.”

  His expression took on a new appreciation. “How can you be creative, get things done, with that kind of oversight?”

  Before I could answer, Paulson and the other guests showed up, and that magic moment of private conversation was over. It wasn’t profound; it wasn’t life-changing, but it was memorable nonetheless. And Jobs was certainly right about the challenge of innovation under the regulatory apparatus. At Nasdaq, we weren’t living the unregulated life. Like it or not, regulation was in the very air we breathed. In fact, without decades of regulatory action in the financial markets, Nasdaq would likely not even exist. We couldn’t shed our SEC skin. We had to embrace it, roll with it, work with it. As entrepreneurs and disruptors, we chafed against it. But over time, we found the right rhythm to our innovation that included the slow machinery of the SEC approval process. And to my surprise, I began to realize that regulation could even be an ally in increasing our competitive advantage and fulfilling the final step in my five-point plan: Stop being satisfied with No. 2.

  A Political Education

  Mike Oxley wants to talk to you.

  When I first heard that phrase, I was surprised. I’d only recently taken on the Nasdaq job, and my education in the ways and means of politics was about to begin. Oxley was the powerful Congressman from Ohio who served as Chairman of the Committee on Financial Services in the United States House of Representatives. His name was on the Sarbanes-Oxley legislation that had defined a new era of financial regulation. Oxley ran the committee that oversees the SEC, which oversees Nasdaq, making him one of the most powerful people in our industry and, by extension, in the country as a whole. And he wanted to talk to me?

  Initially, I admit, the thought bolstered my ego. That was, until Chris brought me back down to earth. “You know he wants to raise money from you, right?” Oh, right. This was politics. The rules of Washington, DC, were different, and there were times in those early days when I felt like a freshman student in a world of long-tenured political experts and professors. Negotiating our financial regulatory structure and engaging our nation’s political class was simply not a skill set I had brought along with me to Nasdaq.

  Yet, it certainly mattered. Our every operation had to be authorized by the SEC, and any changes made to our trading systems had to be approved. Regulations could make or break us; they could encourage good behavior or spawn bad (or both). They could make markets work better—helping securities trading become more equitable and efficient in its allocation of precious capital—or they could do the opposite. They could reward innovation and encourage technological transformations like those we had embraced at Nasdaq, or they could stymie and delay those changes, and shore up our entrenched competitors. They could level the playing field or they could stack the deck. I understood the incentives and motives of businesspeople; politicians, not so much. I needed to know what made them tick, wh
at constituted a win for them. I had to get up to speed in the ways of Washington—and quickly.

  As it turned out, I would soon become accustomed to hearing that Oxley wanted to talk to me. He and I would work together on many projects over the years and become good friends. A fellow sports fan, he helped me to understand that sports and politics have much in common, each involving intricate strategy and gamesmanship. I have fond memories of him recounting great moments from games gone by—unforgettable football plays, epic golf shots, and other sporting highlights. He would segue from describing the strategic sequence of plays in a fourth-quarter comeback from a long-past Ohio State–Michigan football game to describing the legislative pathway and political positions adopted around a particular bill, with the same curiosity and insight, revealing the similarities. His remarkable, near-photographic memory also served him well in Congress, where he easily recalled names, faces, events, details of a bill, who said what in a committee meeting, and so on.

  I wish there were more people in government like Oxley. His eponymous Sarbanes-Oxley Act of 2002—passed in the wake of the Enron and WorldCom scandals and designed to improve accounting standards and transparency in American business—was not popular in corporate America, to put it mildly. The financial industry chafed under its increased oversight and complex reporting requirements. However, Oxley’s affable, engaging personality managed to transcend his legislation’s reputation. After his retirement in 2007, we ended up bringing him on at Nasdaq as a nonexecutive Vice Chairman. Executives from our listed companies enjoyed the opportunity to meet with this pragmatic, middle-of-the-road former Congressman, and they were fascinated to hear his behind-the-scenes stories and get his advice on dealing with the intricacies of Washington. Before his untimely death in 2016 from cancer, his service to Nasdaq was greatly valued.