The Wall Street Fast Lane
No matter what you read or saw in movies about Wall Street in the '80s and '90s it was much wilder than that. Weed and cocaine were ubiquitous, and like alcohol they were often part of the business day, business deals, and after work entertainment. But it was also a period of transformational innovation and market disruption. Fortunes were made, some were lost, and an entire ecosystem of products, services, and businesses fed off the financial largesse of Wall Street fueled by digital transformation of trading systems, market data, and exchanges. Exclusive and expensive clubs, bars, restaurants, and luxury real estate, jewelry, clothing, and car retailers spent all year cultivating relationships with superstar traders and financial industry executives.
Like hungry western bears eagerly awaiting the all-you-can-eat buffet of the annual salmon migration, everybody on and around Wall Street counted down the days to awards of six, seven, and eight figure bonuses at big investment banks and funds. Financial beneficiaries extended well beyond traders and top executives to include IT and software professionals developing the advanced technology, applications, and algorithms that won in the markets. It included operations staff that kept ever larger and more complex trades flowing smoothly and maintained real-time trading positions, risk exposure, P&L summaries, and appeased the regulators.
There were plenty of trading and investment management profits to share on Wall Street during these years, and the often life changing year-end bonuses were expected by professionals at all levels. For many the annual bonus was larger than their guaranteed yearly salary, the amount correlated to measurable performance excellence in someone's given role. Artificial preferences regardless of justification were unheard of, and excuses didn't work on Wall Street or at the vendors and big consulting firms serving the financial services industry.
Sometimes bonuses were expected by employees who thought they were better than they were, but they usually weren't around very long. Wall Street ran on numbers, and tangible performance results were what mattered for compensation and promotion decisions. Performance might mean trading profits for a trader, returns for an investment manager, or trade processing speed, efficiency, and cost optimization in the middle and back office.
Getting a smaller than expected bonus was disappointing, but most people accepted the need to improve performance relative to peers given the level playing field. No bonus in a given year was a message to get better fast or call your favorite headhunter. Low or no bonuses were usually a precursor to termination as part of the yearly culling of the bottom 10+% of performers. Wall Street high performance culture was survival of the most deserving, and the transparent, preference-free pursuit of excellence produced superior business outcomes and happier, more productive employees.
If you performed well on Wall Street your job was secure and you made a lot of money. Nobody cared about race, color, nationality, sex, gender, academic credentials, politics, or who somebody slept with. Wall Street was a transparent meritocracy free of artificial preferences giving unearned advantages to some while disadvantaging others. Nobody back then argued for preferences because it would require answering questions of why, for how long, to what degree, and for what groups in what proportions. 4 Wall Street employees at all levels were well compensated, and so were the hardware, software, application, data, and services vendors. They created, developed, sold, and delivered the high-frequency and algorithmic trading innovations that drove lucrative Wall Street profits. My first trading system company moved market data and applications from stand-alone terminals into integrated "video switching" systems. Video switching was then made obsolete when we introduced digital trading systems with real-time datafeeds and sophisticated applications running over high-speed networks. The digital disruption was worldwide, changing the capital markets industry landscape and the definition of global winners and losers.
As a young trader I held 2 different telephone handsets while "squawk boxes" streamed live trade talk from market makers and I obsessed over stacks of computer screens and flashing numbers. The cacophony of noise on a big trading floor with thousands of traders was overwhelming to outsiders. Special acoustic treatments made sure shouting on the trading floor could be heard by traders across the room, specialized lighting minimized screen glare, and customized HVAC systems dissipated heat from thousands of traders and computers.
Paper trade tickets were written by hand, then manually entered into a trade processing system off the trading floor. As I learned more about technology, I realized those manual processes wouldn't last much longer on Wall Street. I thought about how trading would change until I had a chance to change it myself as a trading system entrepreneur. High-speed computers, real-time data and networks, software and algorithms, and new electronic markets were the enablers and the outcomes of the transformation.
I stopped trading and started designing and selling state-of-the-art trading technology and services before most traders were made obsolete by software applications and algorithms. But my trading experience helped me develop game-changing innovations in trading systems, high-speed datafeeds, and global professional services that turned the art of the possible into cost-effective reality. Digital disruption and new electronic markets spread quickly worldwide, transforming 200 years of financial market history and rendering large trading floors unnecessary.
Two of my companies designed and built the trading and market data distribution systems that made trading faster, cheaper, and more automated. Previously stereotyped and ignored mathematicians and software engineers became highly compensated "quants," "data scientists," and new members of the cool crowd. They used advanced mathematics along with real-time and historical market data to develop trading strategies they coded into applications and algorithms run by ultra high-speed computers and networks.
Wall Street would pay for nanoseconds of speed advantage, so a close partnership formed with the computer and networking companies leading the global performance race. Wall Street embraced any innovation that created competitive advantages, buying from and often investing in the companies delivering those products and innovations. My companies integrated the most advanced hardware, software, data, and networks into trading and market data distribution systems we installed on trading floors worldwide. As product innovation slowed I began selling 5 long-term outsourced managed services contracts to run and continuously improve trading floors and other front to back office operations.
Every high-performance IT vendor had dedicated sales teams focused on Wall Street and financial services. They wanted the revenue but also the drug-like high from winning the widely known Wall Street high performance contests run by smart IT buyers, credentials they leveraged in global marketing campaigns. In those days real drugs were pervasive in financial services and sometimes played a role in how those Wall Street sales were won. It was all part of the game in the '80s and '90s and you had to draw lines, but it was also a period of unparalleled innovation in financial services.
I developed close relationships with senior trading and IT executives on Wall Street and in the Silicon Valley tech industry who helped me, especially at my smaller companies looking for traction. They introduced me to influential people I didn't already know, and I reciprocated with great dinners, shows, concerts, and the hottest clubs and bars they could handle. I became more visible in the media than anyone else working in capital markets, and the TV, radio, and print interviews heightened my credibility with clients and strategic partners.
Wall Street digital innovations and real-time data eventually spread to other industries after the price of the enabling technologies decreased. Vivek Ranadive, one of my early trading system competitors who became a friend, went on to evangelize the "real-time enterprise" and promote "the power of now" after founding TIBCO Software. Later in my career I also moved beyond financial services to introduce AI-enabled software process automation across industries. But the origins of "intelligent automation" traced back to the real-time infrastructure and algorithms developed during the digital transformation of Wall Street.
The trading floor was always an adrenaline rush dating to my first exposure as a recent college graduate. I wouldn't have lasted long as an office worker but music could have been different. I began performing professionally when I was 15, making enough money to help pay for my Duke University tuition and expenses when my family couldn't have afforded it otherwise. I was still considering a performing and recording career at Duke, but my Warner-Elektra demo record wasn't getting much play. Disco was becoming the hot new genre, while I was a rocker after getting my start in jazz. So after Duke I accepted a management trainee job at a big bank, but I was unhappy there until I discovered trading.
Recruiters did some devious and ethically questionable things trying to poach talent. Wall Street paid top dollar to compensate for the mental and physical stress and pressure, but it was still hard to attract and retain good people because other firms were always hiring and headhunters circled like sharks. Everybody working on Wall Street regardless of role or level had deep and rare industry knowledge, strong cards to play for raises and promotions.
I helped design develop, and implement the systems and new electronic markets that made trading and investing cheaper and more accessible while eliminating most trading commissions. New trading innovation and alternative exchanges were spurred on by new regulations that eliminated legacy rules that had protected a member-only monopoly like the NYSE at the expense of investors. Diverse new markets proliferated and all were more transparent, liquid, and 6 anonymous over extended trading hours and alternative execution methods. Market structure innovations provided new options for executing trades that resulted in better prices and lower trading costs, benefitting both retail and institutional investors.
Wall Street money sponsored many charitable events that raised millions for worthy causes, characterized by wealthy donors as "giving back." But to me it seemed the charitable cause was secondary to occasions for rich and successful people to party in some famous hotel's grand ballroom. I went to dozens of "charity galas" and award ceremonies "honoring" whoever had donated the most money to the cause that year. I spent thousands of dollars at hundreds of them over the years reserving tables to invite our top clients. Charities were another beneficiary of the broader Wall Street and capital markets ecosystem of money and wealth.
A successful Wall Street career was earned through demonstrable and measurable performance excellence. Performing on stage helped me develop the skills and confidence to interact with senior executives and traders at a very young age. I built and maintained business relationships in ways my competitors couldn't by taking clients and alliance partners to cool and exclusive restaurants and clubs in New York, Chicago, London, Paris, Tokyo, Sydney, Shanghai, and Hong Kong. A great dinner and drinks were a given, but the night was usually just beginning after dinner.
I took people to clubs and restaurants few knew about and even fewer could get into, and I used connections and brokers to get tickets to Broadway shows, museum openings, and private suites at concerts and sporting events. I played any cards I had to win deals, but always by the rules without stepping over any admittedly gray lines. During the '80s and '90s there were few red lines other than overt bribes or money changing hands, but as policies and business norms changed over time I did too but everybody had less fun.
I think today's highly restrictive rules for client socialization lead to inferior business outcomes, missing the strategic alignment and new ideas that often come from more relaxed out-of-office dialogue. Socializing with others fostered closer internal and external relationships that made business more productive and fun. Now extreme restrictions on permissible client entertainment and cost caps can make going to Chick-fil-A for a Cookies & Cream milkshake look like a decent option.
I pioneered numerous product, data, and service innovations, most with my own ideas and sometimes making the ideas of others real. Selling on Wall Street meant winning tough cost-benefit debates in a smart, demanding risk/reward culture. Cost was less important than tangible innovation driving competitive differentiation since ROI could be realized in a single lucrative trade or by avoiding a big downside risk.
I used my trading experience to identity business inefficiencies and challenges in financial services, and I studied cutting-edge IT advances to know what was technically and functionally possible to address them. My deep industry and IT knowledge coupled with a good bit of creativity, critical thinking, and problem solving led to impactful new product and service ideas that kept changing the market.
After the digital transformation of Wall Street trading systems that began with Triarch the marginally controlled chaos I loved on the trading floor was replaced by computers, networks, datafeeds, and real-time algorithms and applications running in equipment rooms. There were far fewer traders, shrinking trading floors, and legacy exchanges were fighting for survival against new market entrants introducing faster, cheaper, and more transparent trading methods and market structures.
Now the real action was in the flashing lights and perpetual hum of high-speed computers and specialized cooling systems in high-tech equipment rooms. Computers were faster, mostly smarter, could analyze infinitely more prices and markets simultaneously, and made fewer mistakes than human traders. The computers also didn't drink or do drugs, complain, screw the employees, succumb to stress requiring pharmaceuticals or therapy, or get paid millions in salary and bonus only to still want more.
Wall Street and global capital markets operated at a pace and with pressures few people could conceive of or endure, but some people like me thrived in the adrenaline-fueled lifestyle if you avoided too many crutches. Weed and alcohol had long been part of the Wall Street scene, but the surge of cocaine usage in the 1980s was different and ruined lives. The financial and personal rewards of working on Wall Street were diverse and many, but they came at a cost. I was lucky the era finally ended because the constant travel, stress and pressure, and too many late nights out only to do it again the next day were taking a physical and mental toll on me too.
By the mid-1990s Wall Street life was settling down somewhat and regulatory changes spurred a new cycle of innovation. New alternatives to traditional exchanges like crossing and matching systems and investment bank "dark pools" that internalized customer trades with the bank's own trades proliferated. The alternative markets were faster, operated longer hours, and provided better prices, greater anonymity, and more transparent liquidity so sophisticated algorithms could outthink and outmaneuver human traders. Better trade execution was particularly impactful on large trades like those of big institutional investors and funds.
High-frequency and algorithmic trading expanded from stocks into bonds, derivatives, commodities, and foreign exchange. Most trades were now executed by "smart algorithms" accessing and comparing fast, liquid electronic markets to get "best execution" that was measured and reported on. Budgets were effectively unlimited for high-frequency arbitrage traders and market makers to win the speed race, where milliseconds of speed advantage in data delivery meant market insights and low risk trading profits. Highly specialized hardware, software, data, networking, and services vendors sold financial institutions the means to compete and win in the markets. Everybody profited including me.
The stately marble environs of the NYSE and the amphitheater "trading pits" of the Chicago commodity and options exchanges became expensive liabilities. They were very expensive to maintain and enhance but no longer served any real purpose. Exchange trading floors were good TV sets for shows like CNBC's Squawk on the Street where I did interviews, but nothing significant happened on them any longer after trading and market making became electronic and automated.
Maintaining the physical trading space diverted management attention and investments needed for innovation and growth, and new alternative exchanges took more and more market share from traditional exchanges. The innovators made acquisitions, expanded into new geographies, traded more asset classes electronically for more hours, and prospered. Legacy exchanges that didn't adapt either faded into oblivion or were acquired by the winners.
My former client NYSE was ultimately acquired by the Intercontinental Exchange (ICE), one of my new startup clients that our project team brought into existence. NYSE leadership dismissed my warnings about competitive threats for too long, too slow transforming their IT infrastructure and never developing an effective growth strategy. NYSE stayed a private members-only club for too long while the members became dinosaurs. Public exchanges and especially European exchanges were using investment capital and the markets to make acquisitions and to fund global expansion and strategic alliances.
As the '90s came to a close I had a front row seat to the separation of Andersen Consulting (AC) from Arthur Andersen (AA) and the global re-branding as Accenture preceding the blockbuster IPO. I'll share the inside story of how AC won the right to separate from AA and some previously untold stories of intrigue and political maneuvering along the way. Billions of dollars were at stake, and the way we prevailed in arbitration and then executed a global re-branding and an IPO in little more than a year will stay on business school curriculums for many years.
It was one of the fastest, most complex, and highest value global business transformations ever undertaken, and the Accenture IPO was only 2 months before the 9/11 terrorist attacks. You'll hear about the Andersen Worldwide global partners meeting in Paris where our future was decided and inside AC strategies to win in the International Chamber of Commerce arbitration. I was the long-time global client partner for our lead investment banker Goldman Sachs, and I represented capital markets as the industry managing partner on the roadshow marketing Accenture IPO shares to big institutional investors.
I was in New York City on 9/11 and survived through a highly improbable twist of fate. It involved a scheduled and then postponed London trip and an unplanned stop at my office that morning before going to the big market data conference I was sponsoring at Windows on the World. I survived while well over a hundred of my colleagues, clients, and friends at the conference and working in the towers didn't. Windows on the World was on the 106 th floor of One World Trade Center, and nobody escaped from up there. They were all victims of senseless Islamic ideological extremism by terrorists willing to kill people just going to work who were clueless about their bullshit cause or grievance.
In the weeks after 9/11 Accenture helped clients and the city of New York recover, even as we dealt with our own personal and professional losses. The region's telecommunications and network infrastructure in lower Manhattan was destroyed, and the global financial industry would break down without those links between New York and the rest of the world reestablished.
Nothing was ever the same after 9/11, from flying to just getting through building security to meet with clients. Even now I still can't forget seeing Muslims in many countries dancing in the streets celebrating 9/11 and the death of so many of my friends and colleagues and how close I came to dying myself with a wife and one year old son. The events of 9/11 prompted me to leave New York and move to South Carolina in 2003, but I still flew to NY or somewhere in the world every week for another 15 years.
After resigning as the Accenture capital markets global managing partner in December, 2007 I did independent consulting, designed and taught capital markets training seminars, and served on boards for a few years before joining KPMG in 2012 and leading Intelligent Automation. It was a chance to explore new ideas for using software process automation and AI to create new managed services and take operational efficiency and quality improvements beyond the limitations of global outsourcing. But after going back to work I found business life and norms had changed, and not for the better.
The preference-free meritocracy of Andersen Consulting and Accenture had given way to institutionalized special preferences and "diversity goals." Goals became de facto mandates and code words for de facto quotas in hiring, promotions, and compensation. I didn't like it nor did high performers who lost out to preferred identity group members with inferior qualifications and performance metrics. Who could blame them?
Business outcomes suffered, and most top leadership was too isolated from rank-and-file employees to see the widespread dissatisfaction with the erosion of meritocracy. They were ensconced in top floor offices, mistakenly believing that HR corporate platitudes promoting diversity and special considerations for preferred identity groups were welcomed by employees. Frequent promotions of lesser qualified and sometimes clearly unqualified individuals into higher roles elicited lots of internal chatter, and large numbers of high performers not in a preferred identity group resigned. Senior managers lost faith that superior performance would earn them admission into the partnership.
Working on Wall Street in the '80s and '90s was an amazing experience that established the foundation for my entire career. It was life in the fast lane personally and professionally, but it was also an unprecedented period of innovation, market disruption, and digital transformation of trading, capital markets, exchanges, and professional services. Later in my career I leveraged my Wall Street experience in real-time data, systems, applications, and algorithms to lead Intelligent Automation across industries. We designed and sold cutting-edge AI-enabled process automation solutions long before public awareness of AI grew after the launch of ChatGPT. Here's my story…
