It gives me great pleasure to launch Operations Buzz with a short interview with Raymond A. “Chip” Mason. This interview is first in a series of what I call the “Thought Leadership Project.” The Thought-Leadership project is a conversation with business leaders on what it takes to operate smart and sustainable companies. Some of the questions are on leadership, the business environment, the challenges of running large organizations; and others explore the lighter side of the person that runs the organization. The goal is to explore leadership and its relationship to running smart & sustainable operations from multiple perspectives.
About Raymond A. "Chip" Mason
Chip Mason is the co-founder and recently retired as Chairman and CEO of Baltimore-based investment firm Legg Mason. Chip Mason graduated from William and Mary with a degree in Economics. The Mason School of Business at the College of William & Mary is named in his honor.
Chip Mason has chaired the Securities Industry Association, the board of governors of the National Association of Securities Dealers, the United Way of Central Maryland Campaign, the Maryland Business Roundtable for Education and the Greater Baltimore Committee, as well as an Emeritus Trustee of Johns Hopkins University, and past board member of the Baltimore Museum of Art and the US National Aquarium.
This is a condensed version of Prof. Ram Ganeshan’s (RG) interview with Chip Mason (CM).
RG: Tell us about your leadership style. How has your leadership style evolved over the course of your career?
CM: Accessible. In my earlier career I walked the floors to stay in touch with a broad number of our employees, almost everyday. As time went on I continued to be proactive but our size caused a limiting of my ability to try to touch everyone. I remained accessible. Our executive offices was one big room, all of the executives had a desk in this room. We all spent most of the day at our open office desks. Many of the other senior officers didn’t especially love the open office environment but I felt that it helped me. I could communicate easily all day and could determine if we had an issue by the change in conversations or of the tempo, or a sense of concern, etc.
My work ethic was well known by many in the company. I had an in town schedule of arrival bout 8:00/8:30 a.m. and departure of 7:30/8:00 p.m. During the earlier hours, I would deal with new issues and things I had decided the night before that we needed to address. Most of the day was devoted to market issues, phone calls and meeting with people of my schedule. All levels of management knew that from about 5:30/6:00 p.m. until 7:30/8:00 p.m. I would be at my desk for anyone (I sat in the open unless I was in a meeting.) At around 8:00 p.m., I would go home. About 10:30 p.m. I would go up to my desk (all others were turning in for the night) and basically run numbers till 12:30/1:00 a.m. This was my quiet time, my uninterrupted time, my think time, or prove the numbers time.
Several traits that encompass my views are to always be extremely well prepared, know all there is to know about the subject. Be accessible to varied groups or individuals within the company, but don’t undermine your senior people. The most important role of the CEO, in my opinion is to know where you believe the company is going and communicate this simply but clearly to your employees. If they know where you want and expect the company to go, they will help you get there.
RG: As a CEO of Legg Mason, what were the top three challenges you faced: How did you tackle these challenges?
CM: Performance was always the most important issue with a money management and brokerage company. Your customers must make money otherwise where is your value added.
Compliance, we were in an industry where doing the right thing as imperative. Any black marks with the regulatory authority would have a negative impact on your reputation. Reputation was vital to a financial company particularly if you are dealing with the public. Anyone that worked for Legg Mason knew my constant warning “I want no chalk on your shoes”, anyone who has played sports know the chalk lines on sports fields and if you touch the line you get chalk on your shoes. I wanted no chalk on anyone’s shoes.
Hiring and retaining the best talent. This requires great instincts and taking the time to do the multi-interviews necessary to avoid mistakes. We often required five or six interviews to get a cross section view. Therefore, you seldom make big mistakes. To hire the best you must be willing to make an arrangement where you set few limits on their ability to grow (advance) and financial arrangements that are clear and they believe are attainable. The best i.e. high performance people want maximum opportunity, they believe in themselves.
RG: The readers of the Thought Leadership project are especially interested in business operations. What skills and values does it take to operate a successful firm in the financial services industry? Why?
CM: All successful companies that I know have a very strong work ethic. Each area of the business has its own set of skills: research, sales, institutional, individual client, investment banking and trading. All have special skills, temperament, education and talent to name a few.
I assume intelligence is a minimum skill. Key factors that are usually evident are hard work, strong ethics, strategic thinker and the ability to get along with others. Many of the areas in the business require intensity and strong convictions.
This business seems to consistently require long hours and about average pressure. Therefore, if someone doesn’t like either as a long term diet, they should choose another profession.
RG: Imagine that you are putting together a time capsule that is to be opened in 2050. One of the items in the capsule is a note to the then CEO of Legg Mason—what will it say?
CM: Integrity, hard work, hiring the best people, protecting your brand and never compromising your ethics are today’s important attributes of a CEO’s success, I assume this won’t change with time.
RG: What do you do to relax?
CM: I retired.
About Legg Mason
Since its founding in 1899 as a brokerage firm in Baltimore, Maryland, Legg Mason has evolved into one of the largest asset management firms in the world, serving individual and institutional investors in 190 countries on six continents. As of September 30, 2009, they had $703 billion of assets under management. Learn more: Legg Mason