In Sports as on Wall Street, Winning Is the Only Thing
It's a noticeable fact that many of the men who have lost other people's money describe themselves as sportsmen, and operate with an absolute win-loss mentality. If only some of them had settled for a tie.
Avarice is not the only explanation for what's happened on Wall Street. You can see that in the builds of the financial titans who testify before Congress, hard chests and muscular necks brimming out of their dark suits and crisp white shirts. You know the type: the guy who slides with his spikes high in the company softball game. Which raises the question of hyper-competitiveness, and whether it's really such a useful quality on surfaces other than dirt.
Edward Bennett Williams called it "contest living," the unrelieved striving in which "every effort is marked down at the end as a win or a loss." In times of prosperity that kind of strut was called successful ambition, but as new frauds are revealed weekly and financial institutions turn to sand, it's fair to ask whether these super-motivated, aggressive risk-taker chief executives misapplied the notion of business as sport, and got too intoxicated with winning.
"Hyper-competitiveness is not an unalloyed good," says Roger Altman, a former deputy Treasury secretary and current chairman of the investment bank Evercore Partners. "I have some partners who are hyper-competitive, and yet very sober. They know when a deal shouldn't happen. As opposed to, 'Let's just break through this door, and the next door, to get this done.' "
How did so many otherwise civilized men, philanthropists, benefactors and supposed intellectuals become such unapologetic plunderers? It's easy to be cowed by the knowledge of financial people, or at least by their terms. But there is something that any of us can decipher in their behavior: Obsessive scorekeeping got in the way of responsible judgment.
Author and business chronicler Ken Auletta of the New Yorker notes "the human factor" in the behavior of CEOs; the fact that their blunders are not always "made for logical reasons." Often they're driven by personality rather than philosophy, the urge to play hero. "There is no question that these guys see themselves as the man in the arena, much the way an athlete is," Auletta says.
Take the rise of Kenneth Lewis to the chairmanship of Bank of America. Lewis made his first big impression in the company during a Central Park softball game against Citigroup back in the early 1980s, when he showed his willingness to bloody the opposition with his cleats. Lewis is also a frustrated football player, who as a boy yearned to play for Bear Bryant at Alabama, but instead he went to Georgia State, according to the Charlotte Observer. His combativeness is such that in 2004 he was still boasting of winning his first big fight -- when he was 5 years old and took out a pair of twins.
John Thain, the former head of Merrill Lynch with the expensive taste in commodes, ousted by Lewis after he gave bonuses to employees despite staggering losses, was captain of his high school wrestling team in Antioch, Ill., and also wrestled at MIT. John J. Mack, chairman and chief executive of Morgan Stanley, won a football scholarship to Duke, where he played linebacker before he cracked a vertebra. As a rising bond trader and company executive, Mack won the name "Mack the Knife," and was apparently fond of saying, "There's blood in the water, let's go kill," according to Portfolio.
When Jamie Dimon, the chairman of J.P. Morgan Chase, was forced out of his former job at Citigroup in a power play, his idea of therapy was to take boxing lessons. William B. Harrison, the former CEO of J.P. Morgan Chase, had a scholarship to play basketball for Dean Smith at North Carolina, though he gave it up when he wasn't good enough.
No one on Wall Street was more overtly hyper-competitive than Richard S. Fuld Jr., the thick-chested bully who presided over the demise of Lehman Brothers. Fuld is a weightlifter and an ace squash player, and boasts a 10 handicap on the golf course, and he treated negotiations as if he wanted to strip to the waist and bloody someone.
There is a strong natural connection between Wall Street and sports because "both are quite binary worlds, somebody wins and somebody loses," according to Altman, who was a varsity lacrosse player at Georgetown. "They're relatively black and white, the outcomes are not ambiguous. The deal either happens, a win, or it doesn't, a loss. In the big picture, not every deal is actually a win, because some don't turn out well, and sometimes the best thing that happens to a client is that it didn't happen. But at that moment, the task is to achieve the deal, and if you do it's considered a success, and if you don't, it's a failure. . . . And so this business in the modern era has attracted hyper-competitive people."
This tendency to see every transaction as a score is partly why so many firms mistook growth for success, he says. "There are people who have often equated size with success -- the bigger we are, the more successful we are. We've seen just in the past year that's not true."
None of this is to say that competitive rhetoric is useless. Remove it, and organizations would turn to mush. The tricky part is trying to discern when competition fosters excellence, and when it becomes just another form of excess.
Overly broad generalizations about business and sports are dangerous, of course. Some financial geniuses have never worn a varsity letter, just as some behave honorably and others like kleptomaniacs. Perhaps the most accomplished ex-athlete in the entire financial sector is former Treasury secretary and onetime Goldman Sachs chief Henry Paulson, an all-Ivy and honorable mention all-American as an offensive lineman at Dartmouth, where he was also Phi Beta Kappa and an English major. Paulson is an example of what Altman calls "mature" competitiveness. "Yes he's very competitive, but he's been around long enough and is trained well enough to know the boundaries of that," Altman says.
Maybe the real lesson is to beware of the wannabe. Some of these people seem to fall into the dangerous category of "pretty good" athlete. There's nothing wrong with Fuld's 10 handicap -- who wouldn't love to have one -- but the fact is, you couldn't caddy for a good high school team with a 10. And while Mack's scholarship is impressive, Duke ain't Florida. Experience plus some armchair Freudian analysis tells us there are a fair number of overcompensated jerks out there who almost made it in sports, and whose motivating force then became measuring things. There's the sneaking suspicion that more than one shareholder is suffering from these guys' sublimated failures to reach the top in the more primal competitions of their youth.
Look more closely at these so-called sportsmen and what you often find is that they're only athletes "at what you might call the club level," Altman notices. The real titans were too busy self-starting businesses in their dorm rooms to dedicate much time to the varsity. "Have you ever heard of a professional athlete who went on to a senior position on Wall Street?" Altman asks. "Ever?"
The most important quality of leadership is not competitiveness, but judgment, and that lesson of competition is too often ignored. "One of the experiences of sports that more people on Wall Street could use is losing," Altman says. "Character is built through defeat." Social responsibility, long-range planning and responsible stewardship are virtues at least on a par with "winning." Or, as Ron Shelton, writer-director of "Bull Durham" and "White Men Can't Jump," put it: "Sometimes when you win, you really lose. And sometimes when you lose, you really win."