Wall Street insiders believe that if anyone can fix freewheeling Credit Suisse First Boston, it's new Chief Executive John J. Mack. On July 16, Mack discussed his plans for the firm with BusinessWeek Investment Banking Editor Emily Thornton. Here are edited excerpts of their conversation:.
Q: Why did you take this job?
A: I liked the assets and the platform that are here: the combination of having a lending capability, of having a strong international franchise and a strong U.S. franchise. The challenge now of getting it to work much more efficiently and [in a] much more client-centric [way] I think is very exciting. And I like [Credit Suisse Group CEO] Lukas [Mühlemann].
Q: There is a perception that when you left Morgan Stanley it was to become your own boss. But now you're working as No. 2 to another ex-McKinsey consultant. What is your response?
A: When I left Morgan Stanley, I never said it was to be my own boss. That's not an issue for me. When I left, I said I'm looking for a challenge. I'm looking for something exciting that would play to my strengths, which are strategy, building a culture, and leading a team.
Q: How much freedom has Mühlemann given you in running CSFB? Are there any written agreements between you with regard to that?
A: I have a tremendous amount of freedom. As he knows, I would not go out and do anything of significance without his counsel. To make this successful, I think it's very important that Lukas and I talk often.
Q: There is speculation that you are now in the running to become the chief or chairman of the entire Credit Suisse Group. Is there an agreement to that effect?
A: My focus is on this job. There is absolutely no agreement this time.
Q: At this point, what do you perceive to be CSFB's greatest problems?
A: It's the rapid growth they've had over the last few years that makes it difficult. When you do a merger, you have to get guarantees for a number of people to keep them. You have a diverse group of people, a diverse culture, a firm that has gone from 6,000 people to 28,000. Those create big obstacles that we have to get over.
Q: What are your top priorities?
A: I need to get to know the people. That's the No. 1 priority. In doing that, I need to get involved in some of the issues that we're facing. Some of them clearly are in the regulatory environment.
I need to understand what our opportunities are. Some have said, "This guy is a cost-cutter." I don't know if I am or not. But clearly, with the business being in the low end of the cycle here, there are still opportunities for revenue growth and to build businesses. You've got to see where the best opportunities are to put our resources and in what areas there is room to take cost out.
Q: Your comments about desiring to build one firm were interpreted as hints that you need to rein in star tech banker Frank Quattrone. Is this so?
A: As I understand it, there are contracts not only with Frank and his team but with other people and other groups here. I'm just getting my hands around that.
I think if you spoke with Frank, or you speak to some of the people here, they would say they want a one-firm philosophy. I think people understand now that we have the right platform, we have to figure out how everyone can work together as one team. I know Frank embraces that. He has told me that recently.
Q: Is it helpful to your goal to have CSFB spun off from the Credit Suisse Group?
A: I think that would be a mistake. One of the reasons I came here was because of this platform. It allows us to leverage the investment banking and commercial banking capabilities, which is key to competing with Citigroup and other leading financial-services companies. To be involved with the Credit Suisse group I think also creates real stability. I'm not sure what good it would do to spin off CSFB.
Q: Wouldn't it be a way to gain more freedom?
A: I don't want any more freedom. Just look in the proxy. I have all the financial freedom I will ever want or need. So why am I doing this? I'm doing this to have fun, to work with a group of people who I think are very talented, to take a platform that I think is unique and to build from that. That's fine for me. And that's freedom for me.