Tales of financial wonder from the former CEO of Nasdaq.
Founded in 1971, Nasdaq was meant to bring “order and fairness” to the chaotic over-the-counter stock trading system, posting information regularly so traders didn’t have to make separate phone calls to keep buy-sell price quotes current but instead could call in only to make an actual trade. Where the New York Stock Exchange reigned supreme, Nasdaq came to specialize in technology—“the public-market parent to hundreds of promising children” that were too young to qualify for listing on the larger market. As Greifeld notes, representing technology also meant leveraging it, developing systems that sometimes lent themselves to gaming (think Michael Lewis’ Flash Boys). Those systems in turn were built by people in “jeans and sandals, not coats and ties,” who didn’t quite fit into the tidy corporate culture that the financial world represented. After wrestling with this violation of his rule of “cultural consistency,” Greifeld concluded that it was best to let the nerds have their way. The emphasis on consistency is well placed: As the author notes, Nasdaq, being highly regulated and central to the equity market generally, had to be at once innovative and reliable. The “disruptive innovation” that came with instances such as Facebook’s IPO proved a great test, as did the financial collapse that led to the great recession a decade ago, a scarifying event. “We all stared into the collective abyss in 2008,” writes Greifeld.” Anyone who took a good look into that dark and deep chasm, and came back from the brink, has not forgotten the view.” Most of the book is more upbeat than all that, peppered with “leadership lessons” along the lines of, “If you’ve been doing your job as a leader, you should be developing most of the talent you need in-house" and, “As long as you’re headed in the right direction, it’s less important how fast you are going.”
Good reading for fiscal wonks, especially those with an interest in financial technology and information systems.