Since John J. "Mack the Knife" Mack left Morgan Stanley to become CEO of Credit Suisse First Boston (CTN.X) last July, he has been racing to cut costs and assemble a new management team to help him remake the firm into a real force on Wall Street. Despite reducing CSFB's head count by 2,500 and tearing up many bankers' lucrative, multiyear contracts last year, Mack believes CSFB still has a way to go to bring its cost structure in line with its rivals'. On Mar. 12, he said more staff cuts will be needed this year.
When Mack announced on Mar. 25 that he hired CSFB's former co-head of mergers and acquisitions, Brian D. Finn, away from private equity firm Clayton, Dubilier & Rice, Mack also showed that he's serious about revving up the firm's revenues. Before leaving CSFB five years ago, 15-year veteran Finn was considered one of the firm's top dealmakers. Now, he's returning to his alma mater to work in the newly created office of the chairman with Mack and another new recruit, Stephen R. Volk, a former senior partner at law firm Shearman & Sterling. Finn will assist Mack in setting strategy, bringing in new business, and transforming CSFB.
Finn, who spent much of Mar. 25 at CSFB headquarters in New York, spoke that day with BusinessWeek Investment Banking Editor Emily Thornton about his return. Edited excerpts of their conversation follow:
Q: How does it feel to be back?
A: I am overwhelmed by the volume of phone calls and e-mail. I feel great. I was here 15 years. There's a lot of emotion [tied up] in this.
Q: What finally convinced you that it would be a good move for you to return to CSFB?
A: Opportunity and challenge. The challenge the organization has is very substantial in terms of market leadership across business lines. I believe Mack as a leader and the company as an organization are well-positioned to [achieve this]. If I didn't think so, I would not have come back. I'm not coming back solely out of loyalty. I believe this organization can be the big winner I expect it to be.
Q: Why do you think CSFB can be a market leader?
A: The simple, trite answer is great talent. More important, if you step back and look at what CSFB has, it has one of the truly unique platforms in terms of combining world-class investment banking, capital markets, commercial banking, private equity, and particular industry strengths that have not been woven together terribly well. There has not been a lack of capability, but there has been a lack of synergy.
Q: How do you see your role?
A: I will surely spend time outside the firm with clients and business partners. Inside, I'm interested in strategy. But I don't mean grand schemes. The strategy is how to position oneself in a certain industry, in a certain market, in a certain product, and how to align the organization to make sure clients get properly served.
The objective of getting a cost structure that works and is cost-effective is critically important. But it's not the only thing. We must grow the top line. Growing market share and building a revenue base is what will create sustainable value.
Q: Do you feel you have returned to the CSFB you left five years ago?
A: Yes and no. My interactions [in my first few hours] mostly have been with people I know well. In that sense, absolutely it feels like I'm back at the same place because they're my old friends. We all have a little less hair and a little bigger bellies.
[But] I understand this is a very different place, certainly a much bigger place. One of my first agenda items is to get to know [CSFB] again.