2024-11-03 04:40:00
“He doesn’t know the sector, he’s not a trader“He’s not an investment banker, he’s a consultant!” This is how an indignant Wells Fargo analyst summed up the abilities of James P. Gorman at the helm of the banking giant Morgan Stanley when his appointment as CEO was announced in a still turbulent 2010 for financial institutions. This consultant, an Australian labeled as stranger on Wall Street, however, he ended up founding a bank that had at times flirted with the idea of following in Lehman Brothers’ footsteps. It was largely thanks to his courage, honed in the poker games he has been playing since he was 15 and which he will now have to put to the test in what is intended to be the last challenge of his long career: finding, as president of his board of directors starting next January, a new CEO for the Disney empire (and mediating, in the meantime, with the current one, the controversial Bob Iger).
Gorman, 66, was born in Melbourne and is married with two children. He is the sixth of 10 siblings in a family of Irish origin. After completing his compulsory studies in a Catholic college, he graduated in Law – like his sister Katharine, for years a judge of the Supreme Court of Victoria – and began working as a lawyer at the international law firm DLA Piper (then Philips Fox and Masel). But the legal path did not last long: in 1985 he moved to the United States to obtain a master’s degree in business administration (MBA) at the prestigious Columbia University, and once finished he was hired by the consultancy firm McKinsey.
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At the American giant, the executive participated as a partner in the financial department in the development of the online strategy of the Merrill Lynch bank. After more than 10 years of managing his account, he ended up signing up for the entity. From law to banking, through consultancy: the three pillars of economic services. After just two years at Merrill Lynch, he was already head of the stock exchange. In 2006, just before the storm of the financial crisis, Gorman joined Morgan Stanley.
He rose quickly there, too: He started as president of the wealth management group; Less than two years later he was vice president, and in September 2009, a year after the collapse of Lehman Brothers, the bank announced his appointment as CEO. The manager accepted the job questioned due to his professional and personal origins: “Sometimes the focus was on the fact that I was Australian, because there weren’t many foreigners managing banks in this country, and it was a period in that I really wanted to focus on the business and not on my personality,” he said in an interview for the Financial times in 2015.
Under his command, and with many sacrifices, Morgan Stanley went from being a bank whose survival was suspect to becoming a leader in its sector. One of the keys was to pivot the business towards asset management, which was less volatile and provided a more stable income. Another – inherited from his time as a consultant – is the reorganization and control of expenses, including his bankers’ bonuses. When asked about the topic at the 2012 Davos meeting, he replied: “I would tell them they are naive, they should read the newspaper. And if they put annual compensation at the top of their priorities to define their happiness, their problem is much bigger than work.”
Successions
In his first meeting as CEO, in 2010, Gorman provided a list of possible successors in case of an emergency. And, since he announced in May 2023 that he will leave his post at the helm of the bank in 2024, he has dedicated himself to deep casting. That experience, plus his reputation as a mentor to top business leaders – he has a habit of calling new CEOs of large companies and offering them his advice – have earned him the nomination as Disney’s next chairman of the board.
In the particular selection process to replace him, the Australian banker asked candidates for all kinds of personal data and decided to insert them into positions and situations of great public visibility, to see how they performed. He himself, he said in an interview years ago, vomited almost daily due to the stress of his first years at the top. Naturally, at the end of the process, the bank rewarded the three candidates (including the chosen one) with a bonus of 20 million dollars.
The challenge that awaits him with Disney, however, will be greater than organizing a peaceful internal transition. For now, because the executive who will be replaced, Iger, is practically inseparable from the brand, and it is not clear whether he will leave the throne peacefully. Also because the mouse kingdom is not a typical business: from theme parks to streamingFrom movies to cable television to sports broadcasts, Disney is difficult to cover, so the group will need an eclectic leader. In January 2026 there will be a new CEO. Maybe it’s worth turning to a consultant.
Interview between Time.news Editor and Financial Expert on James P. Gorman’s Leadership and Future Challenges
Time.news Editor: Good day, and thank you for joining us today. We’re excited to delve into the remarkable career of James P. Gorman, particularly as he prepares for a new challenge with Disney. To start, could you provide some insight into Gorman’s journey from an unlikely candidate in banking to steering Morgan Stanley through a challenging period?
Financial Expert: Absolutely, and thank you for having me! Gorman’s rise is fascinating not just because of his background but also his strategic vision. When he was appointed CEO of Morgan Stanley in 2010, many questioned if a consultant-turned-banker could lead a firm so deeply enmeshed in the financial crises of that time. However, he proved his detractors wrong. His experience at McKinsey and Merrill Lynch allowed him to think differently about what the bank needed to survive and thrive.
Time.news Editor: You mentioned his experience at Merrill Lynch and McKinsey—how did those roles shape his approach at Morgan Stanley?
Financial Expert: His time at those firms honed his analytical skills and deepened his understanding of risk and financial strategies. Gorman had a clear vision to pivot Morgan Stanley towards asset management, which provided more stability compared to traditional investment banking. This shift not only helped stabilize the bank but also positioned it as a leader in the industry.
Time.news Editor: It’s impressive how he shifted focus towards a less volatile business model. In your opinion, what were the key leadership qualities that allowed him to succeed despite the skepticism he faced?
Financial Expert: Gorman’s resilience stands out as a key quality. Faced with doubts about his capability due to his Australian roots and background, he focused on performance rather than public perception. His ability to make tough decisions on reorganizing operations and controlling expenses, including addressing banker bonuses, set a tone of accountability that resonated throughout the organization. His background in law likely contributed to an analytical mindset, enabling him to navigate complex situations effectively.
Time.news Editor: Now that Gorman is set to take on the challenge of finding a new CEO for Disney, what do you think are the biggest hurdles he will encounter in this role?
Financial Expert: The challenges are multifaceted. First, Disney is undergoing significant transitions, particularly in its content strategy and management structure following Bob Iger’s controversial tenure. Gorman will need to mediate effectively between differing stakeholder interests and the current leadership dynamics. Furthermore, his challenge will be to identify a successor who can not only steer Disney through its current issues but also innovate in a rapidly changing media landscape.
Time.news Editor: Interesting perspective. Given Gorman’s track record, do you think he can leverage his experience at Morgan Stanley to navigate this transition at Disney successfully?
Financial Expert: I believe he will draw from his experiences, particularly in managing transformation and aligning business strategies with long-term vision. His poker-playing background suggests he is skilled in risk assessment and decision-making, which will be vital when making strategic choices for Disney’s future. However, entering the entertainment sector, which operates differently from banking, is a challenge he must be prepared for.
Time.news Editor: Absolutely! As we wrap up, do you see Gorman’s leadership style evolving as he steps into this new role?
Financial Expert: Definitely. Leadership in the entertainment industry requires a different emotional intelligence than that in banking. While he has been known for his stringent control and focus on financial metrics, he might need to adapt to a more collaborative and creative leadership style at Disney, where artistic vision plays a critical role alongside financial performance. It will be an interesting evolution to watch.
Time.news Editor: Thank you for providing such in-depth insights into Gorman’s career and the challenges ahead. It will be fascinating to see how his journey unfolds in the coming months!
Financial Expert: Thank you for having me! I’m looking forward to seeing how he navigates this pivotal moment in his career.